Morning Brew Tops $36 Million First-Half Revenue and Launches Its 10th Newsletter

The business news publisher Morning Brew, an Axel Springer property, launched its 10th newsletter Monday morning, a product called CFO Brew that aims to reach readers in strategic and corporate finance. The publisher has grown rapidly since selling a majority stake to Insider in October 2020 that valued its business at $75 million. It generated $36 million in revenue during the first half of this year, nearly doubling the amount it had brought in by the half-year mark in 2021, according to co-founder and chief executive Austin Rief. Morning Brew, which brought in $46 million in revenue last year, is on pace to grow that figure by 66%. The publisher owes its rapid ascent in part to the rising prominence of newsletters, whose reliable delivery and opted-in audience have made the medium an attractive vehicle for both readers and marketers alike, said Brian Morrissey, founder of the media newsletter The Rebooting. But the publisher that email built will have to succeed in other mediums, such as events, video or podcasting, if it aims to one day pass the nine-figure mark in revenue, Morrissey said. The structure of email naturally limits its ad load. And with a headcount approaching 300 full-time employees, Morning Brew could run out of monetizable surface area, unless it can find traction in other channels––a chasm that has proven challenging to cross for other newsletter-centric media companies. “They have a playbook that they have proven they can execute, and their success in newsletters has given them a huge head start,” Morrissey said. “But if they want to become a company that brings in $100 million or $200 million in revenue, they will need new surface areas.” Business Newsletter Industry Dive Is on Pace to Break $100 Million in Revenue Diversifying revenue streams Morning Brew generates the vast majority of its revenue through email advertising and sponsorship, Rief said. Twenty-five percent of its advertising revenue comes from brand marketing, 25% from performance marketing and the remaining 50% comes from clients who purchase both. The publisher has 6 million free subscriptions across its stable of newsletters, including 4 million for its eponymous flagship product, Morning Brew. The newsletters average an open rate of 40% (compared to an industry average of 22.15%, per Mailchimp) and feature two to three direct-sold advertisements––the publisher uses no programmatic inventory and relies on a salesforce of 35 to work directly with brands, Rief said. A separate creative team produces all of its ads in-house. Morning Brew has sought to diversify its revenue stream both within its advertising portfolio and by expanding into new sectors. By segmenting its email list into newsletters catering to different professional audiences, such as HR Brew and now CFO Brew, the publisher is able to reach business-facing and consumer audiences. It has also begun advertising on newer channels, such as social media and video. Beyond advertising, Morning Brew has expanded into educational content, including six to eight-week career accelerator courses and two to four-week skill accelerator courses. The online classes cost between $499 and $1,599—and the sector has generated a seven-figure revenue, according to Rief. The publisher has also laid the groundwork to expand more into commerce, particularly through its network of eight creators. One Morning Brew creator, the Excel influencer Emma Chieppor, recently helped the company sell thousands of branded mouse-pads, Rief said. Rather than moving the financial needle in a significant way for the company, the example demonstrated that the publisher has an opportunity in monetizing its creators’ relationships with their readers. “We have seen a ton of success with our creators,” Rief said. “That is one of the main ways we are dipping our feet into the multimedia waters––we want to expand beyond the inbox.” Expanding into new mediums Email offers publishers a number of advantages, including its insulation from the identity challenges that plague marketing on the open internet. Readers who sign up for newsletters function like logged-in users, letting Morning Brew connect readers’ identities to their on-site and in-email consumption, said Boostr chief executive Patrick O’Leary. Regardless of what happens to third-party cookies, newsletter audiences will remain easily identifiable. But the limited number of ad placements per email imposes a natural ceiling on how profitable the channel can be. Morning Brew began hosting its first events earlier this year, in addition to unveiling an award series. It has also made forays into video production and audio––it now has four podcasts––but those products are in their infancy and its future will be defined by how successfully it can expand beyond the inbox, O’Leary said. “Morning Brew has become the gold standard when it comes to building a business around email, but at some point they have to diversify out of newsletters,” O’Leary said. “They need to get their revenue-per-user up.” TheSkimm Launches the Second Iteration of Virtual Course Series, SkimmU