Beyond CPM: How Subscription-Based Ad Models Win Over Local Businesses

Many newsletter publishers find themselves struggling to explain CPM pricing models to small business owners who just want to know one thing: "How much will this cost me each month?"

Shane Brady discovered this disconnect firsthand while monetizing his local newsletter in Belleville, Ontario. Despite reaching 10,000 subscribers in a town of just 56,000 people, he found that traditional digital advertising approaches created unnecessary friction with potential advertisers.

His solution? Ditch the CPM talk and embrace a straightforward subscription model.

Digital marketing professionals are comfortable discussing impressions, CPMs, CTRs, and attribution models. Most local business owners are not.

Shane learned this lesson the hard way when pitching his newsletter to potential advertisers.

"When I got into the CPM model with these local businesses, they didn't understand it," Shane explains. "And then when I over-explained it, that got stuck in their heads."

The conversations quickly derailed into confusing territory:

"What if you get another thousand subscribers? Are you going to charge me more?" business owners would ask. "And what if you lose 500?"

The technical explanations were actively working against him, creating hesitation and complexity where there should have been clarity.

Rather than continuing to educate reluctant business owners about digital marketing metrics, Shane adopted a radically simpler approach.

"I'm not even going to get into the CPM conversation anymore with some of these local businesses," he decided. "It's just a subscription model. We sit around 10,000 subscribers a month. It's $500 a month. Are you in or out?"

This simplified offering completely changed the conversation. Instead of explaining decimal-point calculations based on fluctuating subscriber counts, Shane now offers a clear monthly price that business owners can easily evaluate against their marketing budgets.

The results speak for themselves: his newsletter is now 90% booked with advertisers for the next six months.

When selling to local businesses, particularly in smaller markets or blue-collar communities, subscription models offer several advantages:

The easier your offering is to understand, the more likely prospects are to say yes. As Shane found, "When people get confused, they want to do nothing."

A flat monthly rate eliminates confusion and accelerates the decision-making process.

Local businesses appreciate predictable expenses. With a subscription model, they know exactly what they'll pay each month, allowing for better budget planning.

This predictability benefits publishers too. "That'll allow me to consistently know my revenue every month based on the number of advertisers I have," Shane notes.

When you're not tied to CPM metrics, you can focus conversations on the value of reaching your audience rather than technical delivery mechanisms.

For a local business, the opportunity to consistently reach thousands of engaged local readers has inherent value that transcends impression counts.

Subscription models also open the door to creative bundling opportunities. Shane is exploring packages that combine newsletter ads with social media content:

"I'm trying to bundle it together where you get a certain amount of Instagram or social media posts with it, and then you also get your newsletter ad slot."

This comprehensive approach positions your newsletter as a marketing partner rather than just another advertising channel.

If you're considering a subscription model, how should you price your offerings? Here are key factors to consider:

Pricing should reflect local economic conditions. Shane aims for what would equate to roughly a $50 CPM in his market, noting that the "$70-$80 CPMs they're just not going to fly here, unfortunately" in his blue-collar community.

A subscription in a wealthy suburb might command twice what works in a rural area with lower average incomes.

Not all placements offer equal value. Consider creating different subscription tiers based on:

Shane uses several formats: "We have three mini signature ads and then a banner ad at the bottom."

Shane suggests starting around $500-600 monthly for a newsletter with roughly 10,000 subscribers, but emphasizes the importance of testing what works in your specific market.

Begin with a rate that feels slightly uncomfortable—you can always adjust downward if necessary, but raising prices later is much harder.

The subscription model's effectiveness depends on creating perceived demand for your advertising slots. Shane shares a brilliant approach for new newsletters:

"After my first newsletter, I quickly realized that I'm never going to send a newsletter without an ad ever again," he says. "If I see a newsletter over and over again with no ads, I'm never going to advertise in it, because obviously it's not really sought after."

His solution? "I basically went to my three friends who kind of run trade businesses and I just gave them free ads."

This strategic move created the appearance of existing advertiser demand—and it worked. "I ran two or three of those and then I had two inbounds come in. So on my fourth newsletter, I had a paid ad and I have not had a newsletter go out without a paid ad since."

For Shane, momentum truly accelerated after landing one prestigious local client.

"When it really, really flipped was I actually got our professional hockey team in town to advertise with us," he explains. "When people saw that, that was kind of like the aha moment for a lot of these other businesses."

The impact was immediate: "I sent that email out at 6 a.m. and I went for breakfast. I came back, grabbed my coffee and sat down. And I kid you not, I had about 15 inbound advertising requests in my inbox."

This demonstrates an important principle in local markets: businesses look to community leaders and established organizations for validation. Landing one prestigious client can trigger a cascade of interest.

While the subscription model simplifies pricing, Shane emphasizes that personal connection remains essential in the sales process.

"I now reply diligently to all the inbound sales and actually have the meeting, whether that be physical or on Zoom," he says. "I don't just send them a media kit. It goes off into thin air and people think you're too expensive."

The in-person or video meeting allows you to explain the value proposition in terms that resonate with that specific business—something no media kit can accomplish.

"To sell a local newsletter to local businesses, I have to explain the value," Shane insists. "Sending a media kit over just doesn't do it."

If you're considering switching to a subscription model for your newsletter ads, ask yourself these questions:

When you're ready to make the switch, remember Shane's advice: keep it simple, focus on value, and build relationships through personal conversations rather than technical explanations.

The subscription model won't just make selling easier—it will transform how you think about your newsletter business, providing the predictable revenue stream needed for sustainable growth.

Before we dive into this week's insights, I want to make sure you know about all the resources available to support your local newsletter journey:

🎙️ The Podcast - Deep-dive conversations with successful newsletter operators sharing their playbooks and lessons learned | Link

📧 This Weekly Newsletter - Quick, actionable tips delivered straight to your inbox every week | Link

🧠 1:1 Consulting - Personalized guidance tailored to your specific newsletter challenges Link

🚀 Launch Accelerator - A structured program to help you go from idea to profitable newsletter in record time | Link

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