Some of you reach out asking where all these daily ideas come. Well, sometimes it’s a story too big to ignore. Sometimes there’s some divine inspiration that helps me connect some vague thing to my view of the media world. Sometimes I just make stuff up. And, sometimes, I get lucky and one of you will send me a great idea for a story. This is one of those days.
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The Inspiration for today’s post comes from my friend Matthew. I have many friends named Matthew. So, to be clear, this Matthew is Harding. Matthew is a non-coding IT guy. Which means he couldn’t get a machine to display “Hello world,” if you spotted him the “Hello” and a few hundred OpenAI tokens. He can, on the other hand, speak as(s)ymptotically about air-gapped networks. His other skills include teaching yahoos like me enough about calculus to pass a final in under two hours. That doesn’t include an interest in media.
On this particular morning, Matt got an email from Marriott. He sent me a picture of it along with this note, “This is my Marriott weekly email for deals. WHY ARE THEY PUTTING ADS AT THE TOP. Even worse, why does this only bother me now that I read your substack? Sigh. And yes you have my permission to use it.”
I missed the point of his email and replied, “Because an ad at the top gets 3x more clicks than the same at the bottom.”
I wasn’t there when he got my email so I don’t know if he sighed and mumbled, “Donkey.” But, I do know he sent me this, “Yes but my point is, why is Marriott (a brand I’ve already engaged in and have committed to receiving their emails), then advertising ANOTHER PRODUCT from ANOTHER VENDOR in the email? It’s like you sign up for the Loblaws weekly shopping deals email, and at the top of the email they’re advertising good deals on an acupuncturist website. Like wth? They’re not even related! I’m so confused.”
I’m not swift on the uptake. It took two swift kicks to the head for me to get with this program, er, campaign.
Here's the punchline, Matty boy. Everything is an ad network. If you have people you can make money with ads. Marriott has people. I mean they really, really HAVE them.
Subscription email as an ad deliver service (SeaaadS <- for you techies in the audience) comes down to two metrics: list size and open rates.
Marriott’s Bonvoy loyalty program has 200 million members. They’re unlikely to unsubscribe because they might miss a deal. There’s no way members are going to block emails from Marriott because reservation details would go to spam. So, they’re stuck receiving these emails. Better (for Marriott) there’s a good chance almost everyone who gets a Marriot email will open it.
For comparison, Morning Brew gets about 40% of subscribers to open their emails. The best details I could find are 1.1M unique opens from 2.7M subscribers. For more reference, 75% (55 out of 73) open my emails. Of course there are only 73 of you. Maybe that’s because I purge people who don’t open emails often enough for my liking. That’s just me.
Either way, that shows you how hard it is to get a big list AND high open rates. Morning Brew sold last year for $75M. unCharles isn’t worth two cents.
So, why did Matthew see an ad for Blissy pillowcases at the top of his Marriott email? Because (say it with me), Marriott just realized that their subscription email list is an ad network.
How much could emailing ads to people who won’t opt out be worth? Let’s do some 30-second calculus. Marriott’s list is 74x bigger than the Morning Brew list. Their open rate is at least twice as good. Let’s say 80% of 200 million people open Marriott emails (I think that may be low). That’s 160M opens. Or 145x more than Morning Brew. That *could* mean selling third-party ads to Marriott’s loyalists could be a $10B business. For a company that’s worth $70B for renting hotel rooms, that’s a pretty nice additional line of business.
As I’ve been saying. Media is avoidable. That makes ads in media avoidable. Ads in things like Bonvoy or Uber or Amazon can’t be avoided because their services can’t be avoided.
This post started with Matthew so, I’ll give him the closing words, “Yes but at what cost - now they’re shilling for crappy pillows? Talk about lowering the value of your brand.”
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Postscript.
“What bothers me the most is I didn’t even care until I read your substack lol. Now I see the internet devolving into this giant mailing list that just gets sold on and sold on to a new vendor each time. Sigh,” Matthew
That’s about the time Matthew asked me to put an ad for his company at the top of this post for inspiring it. But I’m not a whore. I’m kidding. He didn’t ask.