Morning Brew, the US newsletter publisher that offers a daily business digest, is growing fast – and advertising dollars have played a crucial role.

Starting life just four years ago, it now has a daily subscriber list of almost two million for its flagship newsletter. It’s seen revenue shoot to $13m in 2019, from $3m just the year before – all built on the back of ad revenue alone. Now, after restricting investment into the company to family and friends, Morning Brew is seeking to diversify its revenue stream.

CEO Alex Lieberman told AdExchanger that refusing to seek VC money and reinvesting all profits into the company had been the best way of keeping control at all levels. And ad revenue had been key to being able to do that.

The brand’s readership – young people interested and involved in business – is niche, but valuable. Currently, the brand sells ads and sponsorships for its daily newsletters and podcast. Two new products covering retail and emerging technology have generated an extra 270,000 subscribers between them.

Lieberman explained that the company was now looking at several new revenue-generating options, including charging consumers and B2B, but the first move will be to work with more upper-funnel clients.

Up to now, advertisers have been direct-response clients because, as Lieberman says, “I wouldn’t have wanted to work with anything else but more direct response partners early on. At the end of the day, direct response clients are only going to spend money with you if they’re seeing a return, and the acquisition cost of a new customer looks good relative to other channels.

“So, the fact that we’ve had strong renewals from direct response shows me the power of our brand and our audience.”

Now, the aim is to offer more “holistic” ad packages, which means generating more brand awareness advertising dollars, which includes branded content and sponsorships.

“One thing we’ve learned in conversations with really smart operators is that if you don’t need to raise funding, don’t,” said Lieberman. “We’ve had the impression that the expectation of VCs or institutional capital doesn’t match the natural, healthy trajectory of a media business.”

Building a healthy subscriber base has been crucial to making the business work, of course, so what channels were most effective in bringing in subscribers in the early days?

“We didn’t have the ability to do paid acquisition,” Lieberman said. “So, most of the growth came from our referral programme.”

The referral programme is also why the company now has an appetite for paid subscribers. “More than 10% of them end up referring someone else, said Lieberman, “so it’s like a waterfall.”

Sourced from AdExchanger