Reducing Advertising Costs: Optimizing Your Newsletter vs. CPC Strategy

For many marketers and business owners, balancing advertising costs with each acquired customer’s value can be challenging. When using Cost-Per-Click (CPC) advertising on social networks, costs can accumulate quickly, especially if the CPC is high. In this article, we’ll look at how using an email newsletter can help bring down costs per click and deliver more value over time.

We’ll examine a real example in which each social network click costs $0.30. The goal is to determine an optimal audience size for a newsletter that can attract more affordable clicks over time.

Step 1: Analyze the Existing Cost-Per-Click Advertising Model

Social network advertising with a CPC of $0.30 is a quick way to generate clicks. However, this model has limitations in terms of cost efficiency. Each click costs $0.30, so achieving high click volumes requires a substantial budget.

For example, 100 clicks would cost $30 in a CPC model at $0.30 per click, and there is no lasting connection to the user after the initial engagement. While CPC advertising can drive traffic, it may not be sustainable for businesses seeking to lower their acquisition costs over time.

Step 2: Exploring a Newsletter as an Alternative Marketing Channel

Creating an email newsletter is a popular way to engage customers and build a lasting connection. Unlike CPC advertising, where each click incurs a direct cost, a newsletter can deliver recurring engagement with the same audience, potentially reducing long-term advertising expenses. However, acquiring subscribers for the newsletter comes at an initial cost—in this case, $5 per subscriber.

Here’s how the newsletter will work in this scenario:

When looking to drive traffic and optimize your marketing budget, one of the most common dilemmas is choosing between CPC (Cost-Per-Click) advertising on social media platforms or building an engaged audience via email newsletters. In this article, we’ll explore how a newsletter can potentially provide more cost-effective clicks than paying for each click on social media based on a real-world scenario.

The Problem with CPC Advertising

Let’s assume that each click on your social network costs $0.30. If you need 100 clicks, you would spend $30. While this model is adequate for quick traffic, it can become expensive over time, especially when you need steady clicks to keep your campaigns running.

The Newsletter Alternative

You may consider using a newsletter to reduce your cost-per-click (CPC) over time. Here’s the scenario:

1. Acquiring Subscribers:
   The cost to acquire each subscriber for your newsletter is $5.
2. Click-Through Rate (CTR):
   • For the primary email (1 per month), you get a 5% click-through rate (CTR).
   • For each of the other 4 emails, you get a 1% CTR.

This gives the month an overall 9% CTR across all 5 emails. This means each subscriber, on average, will click about 0.09 times per month.

Key Calculation and Findings

To make the newsletter a more cost-effective strategy than CPC advertising, we need to determine the number of subscribers needed to achieve a cost per click (CPC) of less than $0.30.

• At least 186 subscribers are needed to make the newsletter CPC cheaper than the social network’s $0.30.
• Acquiring these 186 subscribers will cost you $930 in total.
• These 186 subscribers will generate approximately 16.74 clicks per month.
• This results in a newsletter CPC of around $0.29, less expensive than the $0.30 you would pay for a click on social media.

To achieve a lower cost per click than social networks’ $0.30 CPC, you need a newsletter audience of at least 186 subscribers. While acquiring these subscribers costs an initial $930, the ongoing cost per click from the newsletter will be more affordable in the long run.

The benefits of the newsletter model include:

1. Lower Long-Term CPC: As you grow your subscriber base, your cost per click decreases.
2. Recurring Engagement: Each subscriber interacts with your brand multiple times a month, making it a more sustainable marketing channel.
3. Better ROI: Over time, the newsletter provides a more cost-effective method of generating clicks than social network CPC advertising.

Conclusion

For businesses looking to optimize their marketing spend, a newsletter can be a powerful alternative to traditional CPC advertising. While the initial acquisition cost of $5 per subscriber may seem high, the cumulative effect of regular engagement and lower ongoing CPCs can drive better long-term results. By reaching at least 186 subscribers, you can achieve a CPC below $0.30, making the newsletter a cost-effective channel for generating clicks.

Switching from CPC to a well-structured newsletter is financially beneficial and allows you to nurture customer loyalty, leading to more sustainable and affordable engagement.