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This Newsletter Growth Trend Is Straight from Wall Street
By Kristin Egan
Welcome to Trends, a weekly newsletter with the zestiest business trends and actionable insights for entrepreneurs.
So you’re cruising along on Instagram, and see an ad for a newsletter that grabs your attention.
You give the ad a click, and enter your email to subscribe.
That publisher has aced everything up until that point with:
- An enticing message on their ad
- Placed in front of you on the right platform
- A landing page that got you to convert
But after you click “subscribe”, something a little different happens…
SparkLoop’s co-registration widget. Tricky dicky.
This publisher (who you only know from the ad they served you moments ago) is recommending other newsletters.
All of the newsletters are pre-selected, and unless you read very carefully, you’re likely to hit the big pink box at the bottom of the screen and move on with your life.
But let’s look at the newsletters that were recommended:
- An AI healthcare newsletter 💊
- A travel deals newsletter ✈️
- A newsletter about the Greek real estate market 🇬🇷
- A newsletter for entrepreneurs 📈
- And a sports newsletter 🏈
Um. What.
Moments later, your inbox looks like this.
Here’s what’s happening:
👉 The newsletter you wanted to subscribe to is getting paid by every newsletter they’re recommending, so long as you meet some “engagement” criteria (more on that later).
👉 At a minimum, they’re off-setting the ad spend they used to acquire you, but they might be earning more from recommendations than they’re spending on ads —
Which makes them profitable before you ever even receive a newsletter from them.
This, ladies and gentlemen, is “audience arbitrage”.
And it’s either the best or the worst trend to ever grab the newsletter industry, depending on who you talk to…
Arbitrage Is What Now?
If you’re not a securities trader, you may not know what arbitrage means, so let’s break this down.
In the case of securities (where arbitrage is a formidable strategy) it means simultaneously buying a security and selling it at a higher price.
Don’t worry. We’ll explain. Source: Tenor
But this concept extends to other commodities as well.
For instance, Ebay and Amazon have made retail arbitrage incredibly popular over the last decade. Here’s how it works:
- People run around town, buying up name-brand shit at liquidation / clearance sales.
- Then they sell it on Amazon at market price for a profit.
According to Andy Craig, Amazon expert and founder of AdHabit, “You can make good money. It can be a good side-hustle. But it’s not really a business.”
Now, …read more
Source:: HubSpot Blog
