Why Newsletter Business Is Booming for Morning Brew
The origin story of business newsletter Morning Brew has gotten plenty of buzz. In 2015, co-founders Alex Lieberman and Austin Rief – then classmates at the University of Michigan – realized that business students were bored by traditional business news, so they started writing their own email newsletter to keep peers informed and engaged.
“We had no media background, which comes with pros and cons,” says Rief, chief operating officer at Morning Brew. “But I think one of the pros is that we simply sat down and said, ‘how do we think a newsletter should function that educates modern business leaders in the business world?’”
Their brainchild was a five-minute digest of the latest business news, written in what Rief calls a “conversational, witty tone.” (Recent Morning Brew subject lines such as “Good for you, Musk” and “Davos and Busters” hint at the tone you can expect.) The regular updates resonated with readers, and when Rief graduated in 2017, he and Lieberman began hiring a team to scale their business.
The big payoff came last year: Morning Brew grew revenue by 333%, from $3 million in 2018 to $13 million in 2019. Flagship daily (6x/week) newsletter Morning Brew was the primary breadwinner, “accounting for approximately 95% of the company’s overall revenue in 2019,” Digiday reported last week. The company also launched four more products last year – three newsletters (Retail Brew, Emerging Tech Brew, and The Turnout) and a podcast (Business Casual) – to serve new verticals with its signature style of business news.
“If you look at the evolution of some other media companies, a lot of their newsletters have started to mirror our style, our tone,” says Rief. “I think it’s great; I think there’s a need for that.”
Here’s a closer look at how Morning Brew has expanded to reach nearly 2 million subscribers – and why the company will continue to bank on email.
Connecting with Subscribers
Though the average age of Morning Brew subscribers is in the late 20s, Rief prefers to talk about the audience as “more of a psychographic than a demographic.”
“They’re upwardly mobile, curious professionals who want to better themselves,” he says. “We have CEOs of Fortune 25 companies that read Morning Brew. While we definitely have many Millennials, more so we just have people who resonate with our tone and our style. Perhaps they’re reading the Morning Brew for different purposes, but they’re reading because they like the way we write and think that it’s the best way to get their day started.”
Morning Brew leverages reader loyalty to grow subscribers organically through an incentivized referral program. Each subscriber gets a unique referral link – included at the bottom of every newsletter – and is encouraged to share it via email and social media. The subscriber can then earn various rewards based on number of referrals. Three referrals unlock a premium Sunday newsletter called Light Roast, 15 earn the subscriber a “Rise and Grind” coffee mug, and so on.
This word-of-mouth referral program is the biggest contributor to Morning Brew’s subscriber growth, says Rief. When subscribers share the newsletters with colleagues, in Slack groups, and through other channels, they also help foster the brand community.
“When you refer other people to this newsletter it gives you a sense of belonging,” says Rief. “We also very strategically place content in the newsletter that are talking points – fun facts or trivia that you may share with coworkers.”
The community extends beyond a business professional’s immediate circle. Any subscriber who has more than 10 referrals can join an invite-only Facebook group called “The Breakroom.” The group currently has more than 10,000 members, and Rief says members frequently network and swap business stories.
Partnering with Advertisers
All Morning Brew newsletters are free for subscribers, and the company generates revenue through advertising in email. The daily newsletter now earns 89% of revenue, with Retail Brew, Emerging Tech Brew, and Business Casual accounting for the rest.
Rief emphasizes that Morning Brew does not offer any traditional banner ads, but rather partners with advertisers to write native advertisements that will engage readers like editorial content does.
“We work hand in hand with advertisers to create content in our tone and storytell their business from an advertising perspective, and it resonates really well for a general business audience like in Morning Brew,” he says. “We’re finding it resonates just as well with a retail audience, or emerging tech audience, or even an audio audience through Business Casual.”
Longer advertisements run at 150-200 words, while shorter ads may be placed throughout the email, says Rief. According to Digiday’s Feb. 6 article, Morning Brew worked with 180 advertising partners in 2019 – almost double the number from 2018.
“The audience is growing and so bigger audiences, especially when they remain just as engaged like ours is, leads to more advertising revenue if you can create great partnerships – and we have,” says Rief.
Building for the Future
Until the start of 2019, Morning Brew had a single product. Rief says staying focused on the flagship newsletter, rather than trying to diversify early on, was critical to building a profitable business with a lean team.
“As two young founders I think the biggest thing we’ve learned is to be very self-aware and understand what we know and what we don’t know, and to ask for help and then hire where we need to,” he says. “We’ve really done a very good job of that and have hired some incredible people to work alongside us to help us grow this company.”
Over the past eight months, Morning Brew has hired four senior executives, including: Jason Schulweis, SVP/head of brand partnerships; Erika Velazquez Alpern, SVP/head of brand and product marketing; Samir Sheth, SVP/head of content; and Kate Noel, VP/head of people operations.
“Now that we have a bigger team, more hierarchy, more experience, we can launch more products and be confident that we are going to do those things just as well as if we were doing one thing,” says Rief.
While the team is considering the possibility of memberships and paid products in the future, they’re focused on newsletters for now. Rief says Morning Brew will launch two more business newsletters in 2020 and is looking to expand its podcast presence.
“We see so much value in email. Even though there’s been a lot of talk about it in the last year or two, I still think it’s a very underserved market and there’s a ton of room to run in newsletters,” says Rief. “We’re focused on doing more of the same because we keep seeing so much opportunity to grow and be the absolute leader in this space.”
Leah Wynalek is the senior editor for Publishing Executive and Book Business. She has worked at national magazine publishing companies including Trusted Media Brands and Rodale, where she assisted in digital content creation and strategy for Prevention.com. More recently, she used her multimedia skillset on behalf of clients as a content specialist for Philadelphia-based marketing agency En Route.