Over the past five years, most print newsletter publishers have seen direct mail costs rise in reverse proportion to results. So, Cabot Heritage Corporation, publishers of the venerable Cabot Market Letter and the newer Cabot's Internet Stock of the Week, hired an E-Commerce Director, Julie DeFelice, to see if online marketing might be more cost effective.
In late November '99, DeFelice started testing email newsletter sponsorships. She says, "Sponsorships just seemed to be taking off. So, we tried sponsoring newsletters from Multex, TheStreet.com, CBS MarketWatch, Raging Bull, and others."
Traditionally financial newsletter marketing copy is very long and wordy with a hard offer at the end. But these newsletters only allowed very short, generally 35-75 word, text ads. So DeFelice had to invent an entirely new way of marketing subscriptions.
DeFelice boiled down Cabot's long copy into just a few enticing sentences. She says, "We stick 3-4 lines in. That's all. We tell them we have a great stock tip or a stock that's at an average price -- they love low-priced stocks. Then we give them a link to click on."
At first DeFelice always put Cabot's name in the ads for branding, but then one day a newsletter screwed up her creative and left it off. She says, "We were really upset! However we found because our name wasn't there, readers thought the ad was the site's stock of the week and they were even more anxious to click through and get information on it."
Click throughs go to a very straight-forward landing page, which identifies Cabot, thanks users for clicking, and then presents a soft offer: full details on the mystery-stock plus complimentary month's trial to the newsletter and further information. To accept, users simply type in their email address and click submit.
Then for the next month, users are emailed the same exact issues as regular paid subscribers except for one catch -- their issues are clearly marked as delayed for 24 hours after publication date. DeFelice says, "Our information is extremely time sensitive. If they want it hot, they understand they have to subscribe." Every issue includes a subscription offer right up front.
DeFelice continues aggressively marketing to these prospects after their one-month trial is over. She says, "We send them one-page mystery stock email letters to keep them updated and keep them excited. We've probably accumulated at least 60,000- 70,000 names since we started and occasionally when the market starts to do well, well go back to them. We'll always put a message at the top that you're receiving this because you requested to in the pas; and, as with all our emails the unsubscribe information is right at the top. We don't want to get into the whole spam issue!"
DeFelice says, "We've had unbelievable success with everything."
Cabot regularly gets 2-3% response rates from their newsletter sponsorships -- this number is the percent of readers who clicked through and signed up for the free trial. Then an average of 6- 7% of these trials end up purchasing a subscription, although DeFelice has seen that number rise as high as 10-11% for exceptional lists. About 50% of the people who wind up purchasing do so during their month-long trial. The rest trickle in afterwards.
DeFelice definitely feels Cabot's existence as an older, non- Internet company plays a role in these high results. She says, "They know we're a brick and mortar and that we've been here for 31 years. The fact that we're also online is just a benefit, but we're not running this out of a garage, we have a firm foundation."
She adds these very telling words for all publishers today, "If it's just a Web site, then people think it should be free. If you're a newsletter that's sent out on nice bonded paper, they take more value in that information. Probably 85% of our new subscribers opt for the email version instead of paper, but they like to know the paper version exists."
NOTES: Here are two creative samples of newsletter sponsorship ads Cabot has run. The first's link should still be good so you can use it to click through and peer at Cabot's landing page as well. We've put a fake "XXX" on the second one's link because it's old.
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