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Newsletters: Free or fee?

Part III: The e-mail medium also faces tough challenges. 3/30 ReleVents hed: Newsletters: Free or fee? Dek: Part III: The e-mail medium also faces tough challenges. By James Mathewson

One of the most successful aspects of is its Newsletter. Developed and still administered by CU Architect and Chief Technologist Garth Gillespie, it has more than 20,000 weekly readers and continues to be a major traffic driver to our site.

Despite its success in audience numbers, however, revenue continues to be a challenge. While we do have a lot of interest in advertising in the service, we get a surprising number of objections from agencies that want it to be more targeted. We also get requests to make campaigns more contextual–i.e., potential advertisers want to know ahead of time that the newsletter opinion will be relevant to their company before committing to advertising. And we get some agencies that are only interested in rich-media newsletters, which are just not feasible given the fractured state of e-mail client standards.

I suspect our struggles are quite common in the industry. E-mail newsletters have long been an effective way for technology sites especially to drive traffic and augment revenue. Unlike the Web, you can provide advertisers with pretty accurate aggregate subscriber data. But no matter how well-targeted a newsletter is, there are always objections that it does not target a specific group, such as Microsoft engineers, for example.

This attitude underscores a fundamental disconnect between publishers and advertisers. We’ve looked at rolling out lots of little, more targeted newsletters, as InfoWorld does. But when we polled our readers, we found out just what kind of interest we had. And when we told potential advertisers the kind of numbers they could expect, we got less than enthusiastic response. Crunching the numbers, it was doubtful that we could even cover the costs of more Listserv licenses. So we stuck with the weekly. I find myself asking my imaginary ad agency friend, “Which is it? Do you want good numbers or a more targeted audience? ‘Cause you can’t have both.”

Add to this the fact that users are under attack from spam and viruses, and e-mail becomes a tough medium in which to make money. It occurs to me that this is partly behind Michael Tchong’s Back the Net Day, which I needled in a column last week. He’s in the e-mail newsletter game and he’s having trouble making ends meet, despite the fact that his service is highly entertaining and informative and reaches more than 50,000 subscribers. He blames the sagging tech market, and he’s mostly right. We wouldn’t hear any of the above objections just a year ago. Now ad agencies are reaching for objections to thin out their lists of publishers with whom they can spend their shrinking ad budgets.

I don’t want to wait for the market to rebound before considering what we can do to improve upon the e-mail newsletter model. The problem is, I have a hard time thinking about how we can improve upon the model we have. E-mail advertising doesn’t provide enough friction to the reader to justify a fee-based system, as it appears to on the Web. And text-based e-mail seems to be the best alternative. If anyone has any ideas, I’m all ears.

James Mathewson is editorial director of and ComputerUser magazine.

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