Engaged Subscribers vs. Subscribers
Your cost to acquire a subscriber is not the same as your cost to acquire an engaged subscriber. Here’s how to understand the difference so you can tailor your paid acquisition strategy.
When you’re growing your newsletter, it’s crucial to differentiate between the cost of adding an email address to your list and the cost of adding an engaged subscriber to your list.
Generally, people use the term CPA to refer to the cost of acquiring a new subscriber, regardless of their subsequent engagement level.
With SparkLoop, your CPA refers to the cost of adding a subscriber to your list who actively engages with your content, driving positive outcomes for your business.
Why This Matters
Let’s assume you’re using Meta ads to add new readers to your list and that your CPA is $1, which is quite low.
How many of those subscribers are meeting your target open rate, click rate, or conversion rate?
For a client we recently spoke with, it took five of these subscribers to find one engaged subscriber. This means the cost to acquire an engaged subscriber wasn’t $1, it was $5.
Now, with a SparkLoop Partner Program, they’re paying $3 for engaged subscribers, guaranteed to meet their target engagement metrics. This means they’ll spend 40% less for subscribers that drive revenue to their business, without the hassle of testing new creatives, managing their CPAs, or getting locked out of their ad accounts.
This isn’t to say that paid social advertising doesn’t work - it does! But you need to track how many of your signups are converting into subscribers that deliver positive ROI on your ad spend.
(If you are actively driving newsletter signups via a paid channel that drives signups through your landing page, you can offset 50% or more of your ad spend by making paid recommendations with Upscribe).
How to Calculate Your Engaged Subscriber CPA
Calculating the cost of an engaged subscriber on your list involves analyzing your acquisition expenses in relation to the number of subscribers who actively engage with your content and drive positive outcomes for your business.
Here's a step-by-step approach to calculate this cost:
Define Engagement Metrics: Start by determining the specific engagement metrics that matter most to your business. These could include open rate, click-through rate, conversion rate, or any other relevant metrics.
Sum Acquisition Costs: Keep track of your advertising spend across all channels.
Measure Engagement Levels: Identify the percentage of subscribers who meet your target engagement metrics.
Calculate Cost Per Engaged Subscriber: Divide your total acquisition costs by the number of engaged subscribers acquired during a specific period.
This will give you the cost per engaged subscriber.
The formula to calculate the cost of an engaged subscriber is:
Cost of Engaged Subscribers = Total Acquisition Costs / Number of Engaged Subscribers
For example, if you spent $500 on acquiring subscribers and 100 of those subscribers meet your target engagement metrics, the cost of an engaged subscriber would be:
Cost of Engaged Subscribers = $500 / 100 = $5 per engaged subscriber
A Few Other Factors to Consider
Three other factors will help you find the right CPA for your Partner Program:
Your Niche: If your ideal reader is a very specific type of person (IT managers in a corporate setting or e-commerce solopreneurs), you will likely want to use a stricter screening method to ensure you’re attracting the right people. This also means you may need to pay a higher CPA.
Your Desired Engagement: If you’re optimizing for a very high open (50% or more) or click rate (10% or more), you may need to pay a higher CPA.
Your Competition: If you switch to the “Earn” side of the platform, you can see how other newsletters in your niche are screening and pricing their Partner Program. To ensure you’re competitive, it’s important to understand what similar publications are paying.
👉 Questions? Reach out to your account manager for help.