DailyCandy - How a Simple Viral Newsletter Has Blown Away the Consumer Lifestyle Publishing World

CHALLENGE
From the day Dany Levy started her journalism career as a style-trend specialist, joining New York magazine in 1994, she watched the Web begin to infiltrate popular culture.

Her blossoming career began to feel a bit weird -- there she was reporting on the hippest, coolest, cutting edge styles in old- fashioned print-based pubs such as Elle and Time Out New York.

She started thinking about her own content consuming habits. Where did she get her own tips and information about cool new stuff? From girlfriends and sources popping notes to her email box.

By the spring of 2000, she couldn’t resist any longer. Levy decided to leave the mainstream style press and launch an email newsletter that competed directly with them.

How does a new, unknown email newsletter with no financial backing compete with the New York Times, New York magazine, Time Out New York, etc.?

CAMPAIGN
First Levy picked a format. At the time online publishers were all focused on generating a zillion eyeballs and clicks by offering lots of content. Email newsletters from the big women's sites and magazines usually had a long list of story summaries plus hotlinks.

Levy thought, who has time for this?

So she did the complete opposite. Each issue of DailyCandy would be incredibly quick to read, with just one brief story in large eye-friendly type per day. You could read it right there in your email - no clicks required - and then move on with your morning.

Layout and design were critical. If you're going to report on cutting edge style, you can't have a stodgy-looking newsletter.

Inspired by New Yorker covers, Levy hired an artist to create a series of vivid watercolor cartoon images of stylish people and things that she digitized and used as the shell of each issue. She hoped it would brand her issues in an ongoing way that photographs couldn’t accomplish.

Plus, if anyone's email system opened the newsletter automatically as they scrolled through incoming mail, the images would hopefully catch their eye enough to make them stop, and open the entire issue to read it.

New style-magazines usually launch with big lavish parties to get the word out. Levy launched by sending her first issues to her intimate circle of friends, and crossed her fingers hoping viral word-of-mouth would help the list grow quickly.

As the newsletter's circulation began to grow, New York's economy went in the opposite direction. How would Levy sell ads?

She started by designed her ad slots and prices so she'd have something to offer three very different types of advertisers:

#1. National advertisers and brand marketers could purchase graphical banner-style ads in the newsletters. However, to protect the DailyCandy brand, Levy refused any creative that was "too Flash-y." The ad had to fit in style with the newsletter.

#2. Major local retailers, and national advertisers with a direct response objective, could purchase a special advertorial broadcast with their message (about 200-words of copy) sent to the whole list.

Levy limited these to one per week, and carefully designed them so they carried DailyCandy branding and graphics, but were also distinct from editorial newsletters. (Link to samples below.)

She also always offered to have her editors write the copy for the advertiser, because it would get a better response. Plus, she was open to throwing her own personal services into the pot -- you could have an event and invite DailyCandy readers to meet Levy in person.

#3. Smaller local retailers, restaurateurs and national marketers on a tight budget could purchase a text-only ad of about 50 words, which appeared in a thin column at the right of the story.

Unlike Google-style ads, these weren't bordered with a box. (In fact we've heard from several other sources that if you remove boxes, text ads get a better click rate.) Also, many of the advertisers didn't have Web sites or even sometimes email. So, DailyCandy would run a phone number to respond to instead.

Pricing, which ran the gamut from $30k to a few hundred dollars, was set by what offline advertisers would expect to pay in print for a similar service.

Cheryl Feldman, Director of Advertising & Sales, says, "We're dealing with traditional advertisers. They are a different animal than dot-coms. I've learned you throw away your CPM terminology and your cost per click, and you talk to them about what works.

"It's not about numbers anymore. It used to be 'How low can you get me per viewer? Can you get down to ten cents?' Now we're talking about results. I really need to move product, need to get more customers into a store. It's not just a game anymore, it's about successful business."

DailyCandy was lucky that many of its readers were also potential advertisers or media buyers, so ad prospects raised their hands. But Feldman also put together a sponsor hit list, and used the editorial team to write mock-up ads she could use in proposals.

In effect, the editorial team become the creative arm of an ad agency for clients and prospects. "We have sit-down meetings every week on how do we get customers for this client? How do we reinvent the customer's brand."

Example: to bring new life to a staidly-imaged cosmetics line, DailyCandy's editors spotlight one particular nail color in the line and talked about how fabulous it was.

Next, DailyCandy continued to expand in two ways:

Tactic #1. By cutting all the deadwood from the circ list.

Anyone who doesn't open their issue over a period of a few months is ruthlessly cut from the list. "Quality is so important to us, although it may slow list size," notes Feldman. "If we hand our advertisers five readers who turn into loyal customers, that's better than if we hand them a million and they only get a couple of clicks."

Tactic #2. By launching spin-off newsletters.

One at a time over the past two years, DailyCandy has carefully launched three spin-off newsletters: DailyCandy LA, DailyCandy Kids (for parents), and DailyCandy Everywhere (for readers in zip codes outside of NY and LA-metro.)

The launches were cross-promoted to older lists, but no list started receiving a different or additional newsletter as a fait accompli. Each name had to sign up of their own accord, one name at a time. DailyCandy wasn't going to risk its brand with junk emailer accusations.

RESULTS
"I have never in nine years, seen such amazing repeat response," says Feldman. "One out of every three new advertisers comes back. That's something in nine years I've never experienced before."

DailyCandy's current roster of clients includes 80% of the major department stores in New York City, as well as American Express, the US Open, Lancome, Citibank, The Gap, Benetton, Bantam Dell, Levis, LA Sports Club, Canyon Ranch … and many small restaurants, boutiques and spas that you probably never heard unless you're a seriously cool local - or you read DailyCandy.

Just under 200,000 consumers get DailyCandy newsletters now. Levy appears as a frequent guest and style commentator on national, local and cable TV, and it always helps bump site traffic. However, nearly 75% of people who sign-up for the newsletters say they heard about DailyCandy from friends.

Turns out hip, affluent, 25-34 American women are far more influenced by girlfriend's emailed recommendations than they are by the offline media.

Useful links related to this article:

Samples of Daily Candy issues and advertorial blasts:
http://www.marketingsherpa.com/dc/ad.html

http://www.dailycandy.com