Ads or a newsletter? An honest comparison, from people who sell one of them

Our bias, stated up front

The newsletter is our flagship. We make more money when you buy one. So this comparison is written by an interested party, and you should read it the way you’d read a car dealer comparing driving to walking.

The reason we’re writing it anyway is that we turn work away over this specific question several times a year, and it’s better to explain why in public than to have the conversation cold on a first call. Some businesses should not buy a newsletter from us. Which ones is knowable in advance.

What each one is actually for

Advertising buys attention from strangers, now. You turn it on and things happen this week. You turn it off and they stop this week. It is a tap.

A newsletter works on people who already know you — past customers, people who inquired and didn’t buy, referral sources, the neighbour who met you once. It doesn’t produce much in month one. It compounds. Its whole value is that the same people hear from you repeatedly over years until the moment they need you arrives.

They are not competitors so much as different tools. One buys reach you don’t have. The other harvests relationships you already built and then let go cold.

The case for ads, made properly

Ads are faster, more measurable, and easier to stop. If you need customers this quarter, there is no honest argument for anything else.

They also reach people who have never heard of you, which no amount of writing to your list will ever do. A list can only be as big as the number of people who already know you exist. If that number is small, working it harder has a low ceiling.

And ads are testable. You can learn what people want, what language they respond to, and what your market actually pays in about ninety days. A newsletter takes a year to teach you that much.

The case for a newsletter, made properly

Most of what people spend on marketing goes to persuading strangers, while the people who already hired them, liked them and would happily refer them hear nothing for years. That is the gap a newsletter fills, and it is a large gap in most businesses.

The economics are different in a specific way: an ad audience resets to zero the month you stop paying, and a list doesn’t. Everything you put into it stays. Month twenty-four is more valuable than month one, which is the opposite of how an ad account behaves.

It also works on the part of the buying cycle ads are bad at — the long wait. In services where somebody might need you in three years, being the firm they’ve heard from monthly is worth more than being the ad they saw once.

If you have no list, run ads. We will tell you so.

This is the whole point of the post, so it gets said flatly. If you don’t have a meaningful list of past customers and past inquiries, a newsletter is the wrong purchase and you should run ads instead.

A newsletter mailed to almost nobody is a beautifully produced document that reaches a handful of people. The production cost is the same whether it goes to eighty people or eight hundred. At small list sizes the arithmetic simply doesn’t work, and no amount of good writing fixes it.

When somebody comes to us for a newsletter and it turns out they have a list of forty names, we tell them on that call. Usually the advice is: run ads, capture every inquiry properly whether or not it converts, build the list for a year, then come back. Sometimes they do come back, which is a better outcome for everyone than selling them a newsletter that was always going to disappoint.

The order most businesses should go in

For a business starting from very little, the sequence is fairly consistent.

1. Get the destination right — a page that converts, a phone that gets answered, a form that goes somewhere a human looks.
2. Run ads to fill the top of the funnel, funded above the floor rather than trickling.
3. Capture every single inquiry into one place, including the ones that don’t buy. This step is the one that gets skipped and it is the one that makes everything after it possible.
4. Follow up fast and repeatedly, which converts more of what you already paid for.
5. Once the list is real, start the newsletter — and keep the ads running.

The costs are shaped differently, and that catches people out

Ad spend is variable. Every dollar buys a defined quantity of clicks, and if you halve the budget you get roughly half of everything. That makes it easy to start small, easy to stop, and easy to justify month to month.

A newsletter is mostly fixed. Writing, design and production cost about the same whether the list is eighty people or eight hundred. Print and postage scale with the list, but the expensive part — somebody producing four good pages in your voice every month — does not.

That fixed shape cuts both ways. It is why a newsletter to a tiny list is poor value, and it is exactly why a newsletter to a large list is such good value: growing the list makes the same monthly cost do more work every year. Ads never get cheaper as you grow. If anything they get more expensive, because you exhaust the easy audience first.

One more honest note on our own pricing: we bill print and postage at cost with no markup, and that bill scales with your list. It is a real number and it can exceed the production fee. We say it early because finding it out later is the kind of surprise that ends a relationship.

They are better together than either is alone

The framing as a versus is mostly artificial. Ads bring strangers in. The list keeps them. A stranger you paid forty dollars to acquire and never contacted again was a bad purchase; the same stranger who hears from you monthly for six years is one of the best purchases you ever made.

Run only ads and you rebuild your audience from scratch every month for ever. Run only a newsletter and you slowly exhaust a finite list with no new people entering it. The businesses that do well do both, in that order, once they can afford the second.

What to check before you spend on either

Two questions settle this for most people.

• How many past customers and past inquiries could you actually reach tomorrow, with a real address or email? Not how many you’ve served — how many you could contact. That gap is usually the shock.
• When somebody needs what you sell, do they search for it? If yes, ads have a clear job. If no, ads are harder and slower and you should expect to spend more to learn less.

What we’d say on the phone

If you call us with a list of forty names and a thousand dollars a month, we’ll tell you to spend it on ads and to start writing down every inquiry. We don’t make anything on that advice, which is roughly the point of publishing it.

If you call us with six hundred past clients you haven’t contacted in three years, we’ll tell you that’s the most underused asset you own and that a newsletter is the obvious move. Same honesty, different answer.

The only bad version is the one where somebody sells you the thing they sell regardless of which of those two you are.