October 16, 2012
Case Study

Email List Growth: 230% more readers from six-channel test

SUMMARY: Some marketers grow an email list with one or two channels. This team tested six, and grew its list more than 230%.

Find out how the team designed the test, compared results, and uncovered the one trait the best channels had in common. In addition, learn which channels had the best cost-per-acquisition, and which channels did not produce desired results.
by Adam Sutton, Senior Reporter

In June 2011, Techlicious had fewer than 10,000 subscribers to its newsletter. The site publishes simple and straightforward advice on technology for women, and its marketing team wanted a much larger list.

The team tested six channels over five months to uncover which earned the greatest number of engaged readers. The list grew more than 230% over this period, with a 22% lower cost-per-acquisition than the team’s target.

After the test, the team shifted its budget to the best channels to drive ROI.

"I wish we knew this before we started," says Josh Kirschner, Founder and CEO, Techlicious.

Below, you’ll see how Techlicious designed the test to uncover the best channels. We also list the results and describe the tactics the team uses in the top performers.

Step #1. Select the channels

The team had a fixed budget for the test, and five of the six areas it targeted were "paid" channels:
  • Facebook ads

  • Google AdSense

  • Display ads on third-party sites, purchased directly

  • Email newsletter display ads, purchased through an exchange service

  • Cost-per-acquisition (CPA) companies that charged a fee for each subscriber they generated

"If you want to grow quickly, you have to pursue paid acquisition," Kirschner says.

The one "non-paid" channel the team tested:
  • Promotional partnerships with other email newsletters

Step #2. Set the measurement criteria

The quality of subscribers was equally important to the quantity, Kirschner says. The team used four metrics to gauge the performance of each channel:
  • Cost-per-acquisition - the team set a target of $2.50 per new subscriber.

  • Engagement - Techlicious uses a five-star system to score each subscriber’s engagement. The channels were expected to bring a high number of five-star readers.

  • Bad addresses and spam complaints - the number of invalid addresses and subscribers who marked an email as spam would count against each channel.

  • Unsubscribes - the number of subscribers who joined the list and opted out during the campaign would also count against each channel.

Step #3. Launch and track results

Please Note: Do not use the following results to disregard a channel. They reflect the experience of a company with a unique level of cash, time and expertise. Had Techlicious focused on a given channel, or worked harder to refine its approach, then the results in that channel would have likely been stronger.

Techlicious ran the campaign from June to October, and more than tripled its list. The average CPA across all channels was $1.95.

Here are the results for each channel:

Most paid channels failed the CPA test

The ads hosted on Google AdSense, Facebook and other third-party sites did not generate enough subscribers to justify their cost. Display ads on third-party sites came the closest to hitting the target CPA, exceeding it by 35%. Acquisitions through Google AdSense were more expensive than the target by more than 2,300%.

CPA firms failed the quality test

Techlicious worked with five firms to generate subscribers on a CPA basis. The team set a price of $2.50 for each name, which guaranteed this channel would meet the campaign’s cost criteria.

However, the quality of these subscribers did not meet the team’s standards.
  • On average in each channel, 21.8% of subscribers opted out by the end of the campaign

  • An average of only 2.3% had a five-star engagement rating

  • 13% of the addresses sent by one firm were invalid or marked the team’s email as spam. This number hit 6.1% for a second firm

"The worst [firms] were the ones that offered points to people signing up. We had tons of people creating disposable email addresses, signing up for the newsletter, and putting in phony addresses – everything you don’t want as a newsletter [publisher]," Kirschner says.

One paid channel excelled

The email newsletter ads purchased through an exchange service were the only paid channel to earn great results.
  • The ads outperformed CPA firms across the board

  • 11.4% of the names had five-star engagement scores

  • 22.7% had household incomes above $150,000 (an important demographic for the team)

Step #4. Pull insights from the results

Aside from newsletter ads, the partnerships were the only other channel to meet the team’s criteria.

What did these channels have in common? They reached newsletter subscribers.

"If you are marketing a newsletter, where do you want to go?" Kirshner says. "You want to go to people who already are newsletter subscribers. They like getting newsletters. They like signing up for newsletters. You have a friendly audience there."

Step #5. Apply insights

After the campaign, Techlicious shifted its budget into channels that leverage third-party newsletters. Here are the tactics the team uses in these channels:

Choose the right partners

A partner with a big list is appealing, but Techlicious needs to reach the right demographic. The team looks for newsletters that provide simple, straightforward advice to women. They can focus on any topic from health to financial advice.

Finding the right partner is so important that Techlicious hired a consultant who specialized in this area to lend a hand, Kirshner says.

Send dedicated emails

Newsletter ads can be effective, but a dedicated email to a partner’s list earns a stronger response, Kirschner says. A full message gives the team more space to explain how Techlicious is special and how it can help the audience.

Include a giveaway

The team often includes a chance to win a free tech gadget, such as a digital camera, as an incentive to opt in.

Hold onto them

Getting people onto the list is only half the battle. The next goal is to satisfy them.

"It’s up to you to convince them that they should stay by providing them great content that they want to keep clicking," Kirschner says.



Related resources

Email Research: Top 3 tactics to grow your list

Email Marketing: 11% list growth turns branding promos into long-term investments for Ted’s Montana Grill

List Growth: 11% increase from sweepstakes for current subscribers

List Growth: Viral sweepstakes boosts large email list more than 8%

List Growth Tactics: How Kodak added 33% more email subscribers and 53% more YouTube followers

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