I spent several days recently researching a story about the business of email newsletters. Greg Cangialosi, CEO of Blue Sky Factory, an email marketing agency in Baltimore, gave me some great insight. I asked Greg (pictured left) about the business model approaches of email newsletters vs. Websites, from an advertising and monetization perspective.
He said, in a nutshell: "The difference between Website and email advertising is the targeted nature of the [email] list of people. If that list demographic fits the target of the advertiser, they're going to get a good response rate."
Greg pointed to successes like Daily Candy and Thrillist as successful email newsletter companies, and talked about two of the local ones his company provides email newsletter services to: CityBizList in Baltimore and ExecutiveBiz in Washington D.C.
One of the big advances in recent years in email newsletter technology, Greg said, are the features involving sharing with a social network.
Companies disseminating email newsletters can embed them with options that allows the user to share the information on Twitter and Facebook, thus helping them grow their email subscriber base organically and through word of mouth. Pretty cool stuff.
Hit the jump to check out my full story on the topic.
Newsletters: An idea so old it's new
Niche e-mail publications thrive in age of social media, newsfeeds
By Gus G. Sentementes
Will Davis may prefer to get his news and information through slick new methods, such as online social networking sites and news feeds, but he still keeps one old-tech method coming to his inbox: the e-mail newsletter.
"I know if the information becomes one of 40 [news] feeds, it's less likely to cut through the clutter to me," said Davis, a 33-year-old Baltimore marketing professional who subscribes to two industry newsletters based in the Mid-Atlantic. "Because [newsletter] e-mails are a digest, you get all that information in one place."
Several electronic industry newsletters with a journalistic bent have taken root from Baltimore to Washington over the past decade. They have hung on through the recession and at least some appear to be growing steadily.
Meanwhile, other kinds of news outlets - from print to television to some online news outlets - have had to retrench, cutting employees and content as the advertising market has shrunk. Digital media experts think that e-mail newsletters, which typically target niche audiences with news about their professions or interests, will remain a strong and viable business in the coming years, partly because a steady e-mail subscriber is generally regarded as more valuable to many advertisers than a less-predictable Web page visitor.
Industry observers point to the sale of Daily Candy, a popular fashion, food and events newsletter, to Comcast last year for $125 million as a sign of the potential strength of newsletters.
"I think it's one of the best solutions going into 2010," said Amy Webb, who runs Webbmedia Group, a Baltimore-based digital media consulting firm that works with Fortune 500 companies. "The newsletter, I would say, is making a comeback," Webb said.
"The people having success with it are not the ones buying large distribution lists. ... The ones doing a good job are growing organically and producing superior content that fits a niche, which is what newspapers used to do until they became very generalized."
Even as online sources of news proliferate, from social networking sites to blogs to syndicated news feeds, the e-mail inbox remains a coveted spot for content producers and marketers.
Lori Connolly, director of research and analytics for Merkle Inc., an online database marketing company, called e-mail a "linchpin" for users' ever-evolving online habits. In a recent study, Connolly found that 42 percent of people who use online social networks also check their primary e-mail accounts more than four times a day. "E-mail is a vital part of everyday life," Connolly said.
Many of these industry newsletters employ editors and a few staff or freelance writers. In most cases, these editors are aggregating content from news sites and blogs from across the Web, and sometimes producing their own original content.
In Baltimore, CityBizList offers a free general business newsletter and another focused on commercial real estate, targeting top-level executives and professionals. It was started in 2005 by Edwin Warfield, former owner of The Daily Record, a Baltimore business and legal newspaper. Its Baltimore publications have a combined subscriber base of 31,000, while offering similar newsletters in nine other U.S. cities.
The company has a couple of editors and freelancers, and outsources some of its digital production to a firm in India, according to Jay Rickey, editor and publisher of the commercial real estate newsletter.
The company has a Web site, but its meat and potatoes - where the advertisers want to be - are in its newsletters, according to Rickey. "We're really targeting a specific market with hyper-local business news, and the e-mail product is what sets us apart from others out there," Rickey said. "It's a vital part of our business."
In Washington, SmartBrief has been producing industry-specific newsletters for 10 years. The company, which has about 100 employees, has been profitable since at least 2002, when publisher Merritt Colaizzi said she joined.
SmartBrief has 150 e-mail newsletters that go out to niche industry groups on a regular basis, and which are assembled by a staff of independent editors. The total number of subscribers to all its e-newsletters is three million, Colaizzi said.
"It has accelerated very rapidly," Colaizzi said. "When I came here, we had 200,000 readers."
SmartBrief editors will flag the essential stories of the day, summarize them, and offer links to the original content elsewhere on the Web. Colaizzi sees SmartBrief as providing an essential, yet free, service to busy professionals and leaders who need to keep abreast of the latest news in their industries. "The need for what we do is only getting more and more serious," said Colaizzi. "As more sources proliferate and people have less and less time, our mission is to save people time and keep them smart. People have to do more with less. They don't have executive assistants to hunt down news stories for them."
Another Washington-based company, FierceMarkets Inc., pumps out 29 e-mail newsletters and has 950,000 subscribers. The newsletters focus on specific industries, such as wireless or biotechnology. It has 40 employees, with 10 staffers who work on content production, which includes a mix of briefing and linking to outside news stories and some original reporting.
"We recognize that we're not the only source of news that we cover," said M. Sean Griffey, FierceMarkets president.
The company, which launched in 2001, has been profitable "since day one," he said.
Davis, the Baltimore marketing executive, subscribes to a SmartBrief newsletter and another one in the region, Potomac TechWire, to keep abreast in developments in advertising, marketing and technology trends in his industry and the region.
He uses an application called Google Reader to scan news feeds from more than 40 Web sites and blogs. But sometimes, he's grateful to get worthwhile information passively delivered to his e-mail inbox so he can quickly scan it.
"It is a timesaver," Davis said
This is an archived version of the technology blog. For updated coverage, see the current baltTech