Scaling a single newsletter business is hard enough. Delivering a sustainable local news model to 25 US cities and laying the foundations for another 50 takes the challenge to another level.

In an interview with Andy Griffiths, founder of Champion Newsletters, 6AM City's co-founder and chief operating officer Ryan Heafy shared the operating strategies behind the company's rapid growth that underpin ambitious roll out plans.

What are the key metrics?

“The biggest thing for us is size of the audience, demographic overlay, with educational attainment having the biggest correlation to overall addressable market size.

Things that are important but not obvious are inflows and outflows of people, charitable giving per capita, and total retail spend.

We are trying to measure how actively engaged people are in their community. Where we have the highest charitable giving per capita are typically most engaged readers.

For example, Asheville, NC, is a small touristy city but very liberal, charitable, they have the highest open rates, best support, most membership, but lowest ad revenue because it does not have larger businesses to support the ad revenue. We hit a home run on user engagement but struggle in a different way on ad revenue.

Lakeland Florida is punching above their weight from an economic development perspective. Their economic development entity recruited us to the community, as they saw value in the economic impact that we deliver.

They have no editorial control. We bring a third-party voice talking about the city in a cooler, hipper, trendier way that the community engages with.”

Does it have to be a city?

“Cities are important because they have brand affinity, and future launches could well be regional or around a particular vertical, so long as the target demographic has a sense of community (the company calls this “Pride in Place”) and we can establish brand authority.

We’ve thought about covering an entire state, say South Carolina – we have 3 markets there – but it’s not only about geography, it’s about total addressable market size. That’s not necessarily the same as population size.”

Subscriber unit economics

What are the unit economics of the business?

“The average acquisition cost of a new subscriber is under $1 and the lifetime value (LTV) is over $25.

We are targeting 100,000 subscribers per market, at a $10 annual revenue per user (ARPU), so $1m revenue per city is the benchmark.

More mature markets have a $10-$15 ARPU, and brand new markets that are about 1 year old have a $3-8 ARPU, so they grow quickly into maturity.”

What sort of market penetration are you getting?

“It’s challenging to know where everyone is. In addition to local residents, some subscribers may be people who used to live there, went to school there or want to move there.

In Greenville, SC, it would appear that we reach 90% of the population, which sounds great but isn’t likely true to just the city core. We know it has a larger regional effect than we realise.”

Lessons from a 6 year tech stack build

The current tech stack has developed over 6 years and is “pretty much done for the foreseeable future” says Heafy.

“At our size, the content management system (CMS) and email service (ESP) upgrades are both six-figure annual investments and bring significant operational efficiency to the business.”

Content management system (CMS): Brightspot

Email service providers (ESP): Sailthru for media business; Hubspot for B2B marketing emails; Klaviyo for the e-commerce business.

Listings: For events, CitySpark. For jobs, real estate, Typeform.

Editorial style and training: Trainual.

What lessons have you learned from building the tech stack?

“We made some big mistakes and probably won’t make all the right decisions in the future.

Some things we’ve tried have cost us a fortune. We spent thousands of dollars on something that we were developing, and ultimately threw in the trash after 3 months, because it wasn’t going to be worth it.”

What advice would you give to newsletters looking to scale?

“I don’t think it makes sense for anyone getting started to build technology on their own. Every build/buy decision that we have made with technology has always ultimately been a buy decision.

The challenge is how you scale into it. We found it better to invest in integrations of technology.

Many technologies talk one to one rather than one to many. A good example is Shopify. In most cases it can only connect to one ESP or one CMS account, so we had to work around that to ensure data uniformity across platforms.

CitySpark is a platform that lets us charge for event listings to be promoted on the site and in the newsletter, and is automated all the way through to publishing in our newsletter. Self-service advertising methods contribute to a meaningful chunk of annual revenue.”

The key to reaching a wider audience

What differentiates 6AM City from other local news organizations like Axios Local?

“The most interesting part is that we’re winning on a local level and have proven experience in building out the local revenue model and unit economics, which is not easy.

I would suspect that the majority of Axios revenue at this time is not in their local products. They are only just starting to see local advertising maturation, which we know takes some time.

Additionally, a lot of local and national advertisers are trying to disassociate themselves from political discourse and controversial topics.

We separate ourselves by concentrating on celebrating and educating the cities we serve. We provide the content and tools to empower our readers to spend their time, talent and treasure locally. We are seeing a direct brand affinity with the mission from local and national advertisers.

They say: ‘Hey, this makes more sense. I can reach consumers, get conversions and the content feels good for my brand.’

We are seeing those advertisers looking for alternative solutions. They want a direct connection, a net new audience, (different eyeballs to those they have) and better brand alignment for their vision or mission.”

You’ve made a name for 6AM City by being averse to covering hard news. Can you explain that thinking?

“From Day 1 we knew we had to differentiate ourselves and so we decided that was the one way we could separate the product from most other media companies.

Everyone else was covering hard news. The community was looking for a reprieve from that information. We built the product with a consumer mindset, thinking about what we wanted to read, and identified the gaps that were growing in local markets

Click-baity content is not working as effectively as it used to, so media companies that have embraced that approach are having to double down as they rely on people clicking on that content to generate revenue. They prioritize driving eyeballs over adding value for local consumers.

While we may not serve the role of investigative journalist, we lean in on explainer journalism, helping our readers to best understand local civic topics so they can effectively participate in the discussions happening in their communities.”

Unexpected tactics for higher reader engagement

How do you create news that people want to consume as consumers?

“Between development and lifestyle there’s a huge opportunity. When we look at civic topics we take a more educational approach to how things operate.

We can still serve a great civic purpose without digging into the individual influences.

Even though we are moving the needle more than most our decision to limit our focus to lifestyle and explainer journalism means we’ve essentially eliminated our opportunity to secure funding from philanthropic organizations.

But this highlights gaps in philanthropic investment strategies around long term sustainability and impact based journalism. In order to deliver content, the community wants, it is imperative that we designed a sustainable business model.

Folks solely focused on investigative journalism without content diversification and business strategy are finding it harder to monetize and wean themselves off grant-based dollars.”

That unfortunately sets a timeline for the life of those businesses. There’s not a sustainable local investigative model that has truly positioned itself as a winning strategy.

Our model and playbook are set up to establish a consumer focused content and business strategy that could support any market. At some point, we could take our playbook, white label it, give to smaller markets maintaining control over some ad placements on a revenue share model, allowing both parties to be sustainable and extend our reach.

However, this relies on us to truly succeed and hit profitability first. I do think there is a bigger purpose to it at the end of the day. We are 6-9 months away from being profitable as a company, which is huge. Then we can self-fund and really drive and control our future.”

Turning editorial strategy into a science

How do you ensure the 6AM City editorial style is standardized across all cities?

“Ensuring editorial quality and consistency at scale is extremely challenging. We have created a training platform for all aspects of our business including editorial, using technology called Trainual. This platform is a referenceable tool that allows us to get a new editor up to speed in weeks as if they had been with the company for years.

Additionally, our editors have a strong support network, where every 6-8 cities have a managing editor supporting 12-16 people. The team ties into an Editorial Director and a VP of Content who looks also oversees branded content.

We separate like church and state our paid content from earned. There’s additionally a national team that supports all markets.

We have low, limited overhead. There are about 5 people on the national team, 4 managing editors, then 50+ editors. There’s peer support to cover time off, maternity, etc., backfilling into another market when needed. They leverage the same technology and content strategy so it’s easy to provide cross market support.

We leverage social media listening tools and a content sourcing strategy to pay attention to a broad diversity of content within a market, so we are very much the opposite of Facebook and other social platforms which filters content so you only see the things you are interested in and you like.

A 35-year-old white female may never be served content about cultural food festivals due to social algorithms but she loves food festivals. Our approach surfaces top performing content for our team regardless of the content vertical or demographic segment of the community.

This allows us to share content that gets people participating in new parts of the community that they wouldn’t otherwise. Where we focus is coaching tone, voice, content approach, and engagement.”

Partnerships, not SEO, are key to growth

How do you approach list growth?

“When we first started it used to take 12+ months to grow to a meaningful audience size and start generating revenue, and now we can achieve a meaningful audience and revenue on the day we launch.

If we are starting in a new City our VP of Expansion and growth team will go in and establish relationships with the city, local chamber of commerce, downtown association partnerships, children’s theaters, places we know our audience is heavily involved.

We will do co-promotional engagements, double opt-in. We’ll use cross-promotional activities to get our brand into other email newsletters and rapidly boost our growth that way. By creating partnerships, we can usually get up to 10,000 to 20,000 subscribers pre-launch.

We have a 90 day window pre-launch where we are focused on building subscribers. These include good low cost organic boots on the ground methods, hustling – in addition to paid marketing efforts.

We’ve perfected a suite of content for every city that we know converts well. Knowing what works, we then use Facebook lead ads and similar tools and can acquire subscribers for under $1.

We have perfected the paid growth model behind launching in a new market, knowing that we can deploy $20,000 to 50,000 over a few months to achieve our desired target audience size.

Socially acquired subscribers stay for about 18 months on average and our organically-sourced subscribers are even longer at 24+ months, an awesome retention of our subscriber base.

We are always in the hamster wheel of bringing more people into the process.”

Reasons to avoid certain advertisers

What’s the relationship between editorial and advertising sales staff?

“Our editorial content is entirely independent from our advertising and paid content side of the business.

We are moving away from the commonly utilized asterisk and other passive identification to a more identifiable design for sponsored content, as part of a new email design rolling out by the end of March.

Local readers sometimes have an aversion to national advertisers because the product is positioned as local. We have partnered with some brands that were controversial in the past and we got more pushback from readers regarding the ads than anything else.

We don’t take policy or political advertising. We welcome feedback from our readers and adapt to ensure the balance of editorial to advertising (and the type of advertisers) in the product aligns with consumer interest.

How would you do things differently if you were starting again?

“We might start with one editor publishing 3 days a week for a couple of months while launching a new market, to offset some of the initial launch cost and then grow into a 5 day a week operation.

Launching in 16 markets at the same time, while successful, was expensive, and we can take different steps to expedite the path to profitability and sustainability in the future.”

Mapping the growth path and subscriber targets

What does the growth path look like from here?

“Upon a new cash infusion into the company we would be putting it into audience development first, then investing in new markets. We can get ourselves to 2.5m subscribers quickly, by deploying capital around audience growth. Audience growth and greater penetration into each market will be a big focus for us in 2023.

We are concentrating on perfecting the unit economics for each market and perfecting the path to profitability. We want to be consistent and scalable. The 16 cities rolling out are all tracking and growing as expected. We are proving the model and positioning to expand to 50+ cities or whatever’s next.

We have identified about 150 good expansion opportunities in the US. We are testing some bilingual content in San Antonio, Texas, to explore market reception and potential.

If we were to expand beyond the US, English or Spanish speaking countries would probably be the first. Canada, Europe and other Spanish speaking countries would make sense if we expand internationally, but it will require additional capital and new resources to scale, which we’ll certainly explore over the coming years as we achieve profitability.”

Sign up to Champion Newsletters to discover more best practice newsletter case studies and strategies to transform your publishing business.

With website revenues failing to replace falling print income, many local news publishers are turning to email newsletters as a way to diversify revenue. 
For local newsrooms considering taking this route, this article sets out a path to a financially successful free email newsletter. By Andy Griffiths, founder of Champion Newsletters.

With this in mind, perhaps the best and the easiest first step is to curate a round-up newsletter. The Miami Herald offers a “5-minute Herald” and is one of many local print titles in the US and elsewhere offering its best coverage in a daily email newsletter.

Many larger local news publishers use newsletters to drive eyeballs to their websites to gain ad clicks, but while this approach has been profitable, ad rates keep falling and the user experience can be frustrating. There’s evidence that the days are numbered for this model.

Far better to view the newsletter as a mini-newspaper providing a service in itself. This requires a mindset shift for newsrooms and an acceptance that the newsletter is not competition. The upside is greater reader engagement, brand awareness and, when established, more attractive inventory for advertisers and sponsors.

The temptation in the newsroom is to perpetuate loyalty to print readers and publish an email summary only after the paper has hit the streets. With so many other sources of news available, the problem with this is that the content lacks immediacy. On daily newspapers, workflows need to be realigned into an “email first” strategy allowing the brand to become associated with faster news delivery, with the print version following up with more in-depth coverage.

Given that a newsletter can only carry a limited number of items compared to the print edition, there’s an argument that the curated summary is in fact a marketing tool promoting individual copy sales or subscription memberships.

Community Impact, which publishes in Texas, does a good job balancing between an informative daily newsletter with up-to-the-minute news, while offering web links for those that want to go deeper, and a monthly print offering.

The Bristol Post in England offers 8 free email newsletters giving readers a choice between news about local politics, courts, general and 4 geographical localities around the city.

2. Set up a newsletter publishing platform

Technology considerations are dependent on a news organisation’s existing arrangements, but for a local newsroom looking to start a newsletter from scratch, an off-the-shelf solution is best.

Most will provide ready-made design templates that only require minimal alignment with the existing newspaper brand. One particular advantage of the dedicated newsletter platforms is that they provide turn-key infrastructure to offer readers free or paid subscription options.

Bespoke solutions that integrate with existing content management systems may seem appealing but are more expensive, have a habit of coming in over budget and can ultimately not be fit for purpose as priorities change.

When going with the off-the-shelf route, understand the distinction between dedicated newsletter publishing platforms such as Ghost, beehiiv, or Substack and email marketing platforms like Mailchimp and Convertkit, which may have different priorities such as e-commerce. In both cases, costs are relatively low and usually scale according to list size.

Local newsrooms could consider launching stand-alone newsletters, operating in parallel with the newsroom and enable journalists to be retrained as multi-platform. 

> Also by Andy: In conversation with 6am City

3. Grow the subscriber list

There are several no cost or low cost starting points for list growth. The first is to advertise the newsletter in the print version and on the website. Newsrooms need to throw away any feelings that this is somehow cannibalizing the print audience and driving print readership lower, and view it rather as a transition to digital while still promoting the print for those that love that format.

One way Miami Herald readers are encouraged to subscribe is by making signing up a condition of viewing articles on the website.

Start with promoting the newsletter on free social media channels, and only when the newsletter formula has been proven should you move to paid advertising on Facebook, Instagram or LinkedIn.

Use barter details to get local businesses with email lists to promote the newsletter in return for free advertising space. Gain readers by referral programmes that encourage and incentivise sharing that can work with the simplest offerings, such as a local guide PDF.

Some local publications have successfully grown their email list with traditional direct methods, such as leaving postcards with QR codes in shops and community outlets. 

4. Engage readers

Once the newsletter is up and running, it’s important to regularly engage with subscribers through content, offers, and other communications. This will help build a loyal subscriber base and encourage them to become paid members.

Engagement ideas are limited only by the imagination. Quizzes, prize draws, birthday shout outs, surveys and polls, all serve to strengthen the bond between publisher and reader and make the newsletter a habit.

Editors should develop a voice that connects with readers and engages on a different and more personal level than simply the presentation of news content. Readers want to be led to the important news with insight and advice and this develops loyalty and trust.

> To add to your reading list: 15 essentials for a successful newsletter

5. Monetize

There are many ways to monetize a local news newsletter.

• Paid memberships: Offering exclusive content and special offers to subscribers can encourage them to become paid members, which provides a steady stream of revenue for the newsroom.

Newsletter Journal, a print newspaper in Weston County, Wyoming, runs banner advertising for a local bank in its free weekly newsletter. 

• Advertising and sponsorships: Advertisers and sponsors are becoming increasingly interested in newsletters because they offer accurately targeted and engaged audiences. Even relatively small audiences are of interest.

• Affiliate marketing: By promoting affiliate products or services in the newsletter, local news publishers can earn a commission on any sales generated through the newsletter.

• Premium content: Offering premium content, such as behind-the-scenes access or special reports, to subscribers for an additional fee can generate additional revenue.

• Partner event promotions: By promoting events, such as workshops or webinars, newsletters can generate shared revenue from ticket sales.

• E-commerce: By offering products, such as books or merchandise, further revenue can be generated.

By using existing editorial resources and an off-the-shelf platform, a local email newsletter can be launched for under $5,000. The variety of revenue generating options makes it difficult to generalize on potential returns, but given such low costs, they can be very profitable.

6. Analyze and optimize

The starting point for analyzing performance is tracking and maintaining a watching brief over newsletter analytics and metrics. An off-the-shelf platform can provide good, basic data.

Comparing open rates is a top metric to follow, showing what type of content is winning with the audience, and what subject lines attract the most interest. 

The ability of the newsletter format to be a testing vehicle to achieving optimum engagement gives it a significant advantage over a print newspaper. Editors can try new things, record their impact and respond with more of the same or try something different again in a virtuous loop of publisher-reader development.

As one of several new revenue stream options for local news publishers, the newsletter is perhaps the most versatile and one that deserves serious consideration.

Andy Griffiths is a consultant and the editor of Champion Newsletters, a guide to best practice newsletter business models. You can find an example of this newsletter, an analysis of the Morning Brew Newsletter, on The Audiencers.

Andy Griffiths is a newsletter fanatic! Fascinated by business, journalism, copywriting, marketing and investment, he brings them all together through newsletters. Andy has worked hands-on in the industry for 25+ years, having founded and managed 3 newsletter businesses and launched or acquired 20+ others. He recently launched yet another newsletter, this time sharing the winning formulas for engagement and revenue generation through (you guessed it) newsletters!

Morning Brew, in short

Featured Newsletter: Morning Brew

Status: Daily, consumer, free

Newsletter Type: Engagement + Sales

Purpose: To inform and entertain readers, covering the latest news from Wall St to Silicon Valley. “Informative, witty, and everything you need to start your day.”

Launched: 2015

Subscribers: 4 million

Word count:  2,142

Sent from: Morning Brew

Subject Line: Do robots have souls?

Design: The masthead is plain and simple two colour, with a brand logomark. It’s simple and businesslike. No need for fancy graphics.

Next comes a prominent but unobtrusive advertising brand logo. The relative size of the masthead and the brand logo is just right. Any bigger and it would compete with the masthead – any smaller and it would be inconspicuous.

This arrangement means the reader is gently but firmly introduced to the Babbel brand. “Together with” is nicer and warmer than saying sponsored by.

This is the publisher giving a nod to the fact that they and the reader are in this together. Without the sponsor there would be no free newsletter.

Editorial: Even though this is a business-like newsletter for young professionals, content starts not with an urgent dive into the news, but with a friendly greeting, and continues with a human take on events.

Business coverage never used to come with a smile and a welcome.

The welcome note today is from Managing Editor Neal Freyman.

Neal makes a wry comment about editing the newsletter in an airport amid the “soothing” music of aircraft taking off, and invites reader involvement with a question about airports. This sets the tone.

You feel like you’re in good hands, being guided through the day’s interesting news by someone who is present and on the case for you this morning.

Here’s a breakdown of the main editorial elements

The newsletter carries 36 mostly curated items. There is little or no original reporting.

There are 3 largish editorial articles without links, then we move into round-ups that invite reader to click to the Morning Brew website or to other sites.

There are 5 different short bullet-point type features that look at current and future news, items of light-hearted interest or trivia.

1. Market Report

It’s a Monday morning, so instead of a previous day’s market report, there are year to date numbers providing longer view context to the financial markets.

The commentary is conversational, trying to connect to investor emotion at the market slump.

2. Main article

The author acknowledges that Artificial Intelligence is a heavy subject for a Monday morning, and just by doing this lightens the mood.

A Google employee claims to have had an “emotional conversation” with a Google chatbot. Google denies this and their side of the story is given equal weight.

At the end there’s a section called The Big Picture, which gives context and the author’s considered comment.

The source seems to be The Washington Post and Morning Brew doesn’t have a problem “lifting” much of the detail for a fulsome 390-word version of its own. The Washington Post is credited but there’s no link.

This approach is commonplace in curated newsletters, particularly where a story has been widely reported by many media outlets. 

3. News summary

Entitled Tour de headlines, this is three paragraphs of 60-120 words, each with an emoji to give a lift. Today it’s gun reform, white supremacist arrests and a heatwave in the West.

Space and reading time is saved by condensing and bolding the headline in the first line, instead of giving it a line of its own. Great sub-editing summarises a complex story yet includes significant detail and historical context. 

4. Calendar, Grab Bag, Brew’s Bets, What Else is Brewing:

There’s similar brevity applied to these four other sections. 

The word count of each item often tapers down as we go through the list, accelerating the reading speed and pushing the reader to the end, and on to the next item.

In Grab Bag, there’s the regular formula of a quote, a statistic, or something else to read or watch.

5. Advertising

At the start of the newsletter, we were already introduced to Babbel and the “Together with” line is repeated to introduce 130 words of advertorial copy. This is native advertising – copy in the same style as editorial but selling a product.

The advertorial doesn’t seem pushy, mainly because copy is written intelligently and with readers in mind, and crucially, in the voice of the newsletter: “You could be speaking a new language in just 21 days…” and there’s a seemingly generous 60% off offer as well.

The way the copy is presented implies it comes with Morning Brew’s endorsement, for which the advertiser is presumably paying premium.

With this level of closeness, advertisers need to be selected with care, as the product being sold will ultimately reflect upon the newsletter brand.

Babbel is the only prominent advertising and the publisher resists the temptation to sell a second advertising slot lower down. The balance between commerce and reader experience is a constant challenge for publishers and Morning Brew gets it just about right.

There is less obvious native advertising within the Brew’s Bets section, which starts with five links to business, money and media articles of interest.

At the end are two paragraphs of sponsored advertising content, denoted by an asterisk.

6. Referral Programme

The engine of Morning Brew‘s growth. Each newsletter contains details of how to earn merchandise by encouraging friends and family to sign up.

The scheme seems generous, persuasive, and above all easy.You even get a running total on the referrals you’ve made.  

Conclusion: Morning Brew is a pacey, “we won’t waste your time” offering for a busy 25-35 something professional waking up and wanting to be informed, quickly.

Here are the 3 best practices that underpin the success.

1. Superb word craft with tight but light writing, sub-editing and a sense of humour.

It’s lively, the snippets are interesting, there’s no filler stuff. Links are to external sources of information of real value.

The news is fresh but the delivery gives the edge, using relaxed and more accessible language than formal newspaper reporting. There are shortcuts, shorthand and signposts everywhere.

2. Carefully balancing the interests of readers and advertisers.

In the commercial department, there’s a delicate dance between selling advertising to fund the newsletter and serving the reader without demands and distractions.

Although there will always be questions about the line between editorial and advertising, Morning Brew takes a fair view, disclosing commercial relationships.

There are subtle efforts made to explain to readers that the newsletter wouldn’t exist without advertising.

3. A highly effective referral programme.

There’s nothing better than a personal recommendation and Morning Brew’s in-house developed referral software has supercharged what would already have been fast adoption rates.

This isn’t the place to analyse the intricacies of referral programmes, but needless to say they are now firmly on the agenda for newsletter publishers, and independent services providers are queuing up with offerings.

Final thoughts

No one should underestimate the mountain of work that goes into producing such a comprehensive, interesting and above all, alive newsletter, every morning.

The phenomenal growth shows the upside of investment in quality, accessible content, supporting by this advertiser funded business model.

It’s why Morning Brew hit $36m in half-year revenue this year (across all its newsletters), and is on track for continued expansion.