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Inbound Success Podcast

What do the most successful inbound marketers do to get great results?

You’ve heard the stories about companies using inbound marketing to dramatically increase sales, grow their business, and transform their customer relationships, but not everyone who practices inbound marketing knocks it out of the park.

If you want to know what goes into building a world class inbound marketing campaign that gets real, measurable results, check out the Inbound Success podcast. Every week, host Kathleen Booth interviews marketing folks who are rolling up their sleeves, doing the work, and getting the kinds of results we all hope to achieve.

The goal is to “peel back the onion” and learn what works, what doesn’t and what you need to do to really move the needle with your inbound marketing efforts. This isn’t just about big picture strategy – it’s about getting actionable tips and insights that you can use immediately in your own marketing.

Mar 16, 2020

How did Morning Brew go from zero to 1.8 million email subscribers in just two years?

This week on The Inbound Success Podcast, Morning Brew Senior Product Lead Tyler Denk shares the story of how he and and the small founding team at Morning Brew grew the scrappy email startup into the darling of the email newsletter world.

Tyler shares details on Morning Brew's referral program, which was responsible for the bulk of the newsletter's early growth, as well as his thoughts on why quality content is the single most important factor driving the company's success.

Learn what worked for Morning Brew in the past, what they're doing now, and what they plan to focus on in the future as they launch new newsletter products and continue to grow their flagship brand.

Highlights from my conversation with Tyler include:

  • Morning Brew launched two years ago as a daily business newsletter that had the goal of making business news engaging and enjoyable to read.
  • Since then the business has expanded to include additional newsletters such as Emerging Tech Brew, Retail Brew and The Turnout, as well as the Business Casual podcast.

  • The company is currently undergoing the transition from a single daily business newsletter to a media company.
  • None of the company's founders came from a journalism or business background, so they intuitively took a very unconventional approach to the newsletter business.
  • Morning Brew is 100% ad funded, but all ads are in the form of native content that is created by the Morning Brew team, not the advertisers.
  • Morning Brew is very picky about the writers it hires. They look for people who understand business and finance but also have a strong sense of humor.
  • When it comes to design, Morning Brew's goal is to have a newsletter that is aesthetically pleasing but that doesn't have design that takes away from the content.
  • Like every email newsletter, Morning Brew relies upon tracking pixels to see if readers are opening the email newsletter, but because so many people have images turned off by default in their email clients, they need to incentivize them to turn images on in order to get those analytics. They do this by optimizing the image ALT text.
  • One of the biggest things that has driven Morning Brew's growth is its referral program.
  • Every Morning Brew newsletter has a sharing section at the bottom that tells the reader how many referrals they need to get before they qualify to receive an award, and provides the reader with a unique referral link.
  • Readers are incentivized to share in a variety of ways, from SWAG to winning free trips, laptops and more.
  • Morning Brew uses double opt ins to ensure that the new email addresses for subscribers are valid before awarding referral points to readers. 
  • Recently, they've supplemented the referral program with paid advertising and the team tracks their cost per acquisition closely.

Resources from this episode:

Listen to the podcast to learn how the team at Morning Brew grew the subscriber base for their email newsletter to 1.8 million -- and what you can do to get more email subscribers, too.


Kathleen Booth (Host): Welcome back to the Inbound Success Podcast.

I'm your host, Kathleen Booth, and today my guest is Tyler Denk, who is the Senior Product Lead at Morning Brew. Welcome, Tyler.

Tyler Denk (Guest): Hey, thanks for having me.

Tyler Denk and Kathleen Booth
Tyler and Kathleen recording this episode.

Kathleen: I am really excited to have you because I have spent quite a bit of time in the last couple of years studying what makes a great email newsletter, and a lot of that time was spent looking really closely at Morning Brew, which we can talk about in a minute.

But before we jump into our topic for today, can you tell my audience a little bit about yourself, about Morning Brew and how you wound up doing what you do today?

About Tyler Denk and Morning Brew

Tyler: Yeah, sure. I don't know where to start when we... I might need to start with myself.

Kathleen: Yes, that would be great.

Tyler: Throughout being in Baltimore, Maryland, I was friendly with one of the co-founders of Morning Brew, so that alludes to how I got involved with Morning Brew.

Eventually, I'll fast forward, went to the university of Maryland, did mechanical engineering. I taught myself how to code while in college and me and a few buddies came up with a concept for some web application startup company that we did in college. Essentially it was to help entrepreneurs and startups connect to other software developers.

The problem we had was we couldn't code ourselves, ran into the problem getting to build the website. We needed to learn how to code. So that's what forced us into teaching ourselves how to code.

We built that website, and running that company while in college was a tremendous experience and that's what got me involved in like the entrepreneurship startup software world.

Fast forward a little bit from there, that we ended up eventually shutting down, but Alston, who is one of the co-founders from Morning Brew -- at the time there was just three people, they just graduated college -- were going full time with Morning Brew and they needed some tech help.

They asked if I could freelance on the side before I started a full time job. Pretty much all summer spent building the website and working on Morning Brew and eventually that led to a full time offer.

So I've been in Morning Brew pretty much from the beginning since when they went full time with it, two and a half, three years ago, and initially joined as a growth engineer and the first like, tech product growth hire essentially in that kind of world.

Kathleen: I love so much about this story, but before I ask all these questions that I have in my head, I did not realize that we had the Maryland connection. Because I am in Annapolis right now, went to college in Baltimore. So we'll have a whole separate conversation about that after I turn off the recording so that we don't force everyone to listen to the Maryland conversation.

And that's awesome. I love that you guys were basically a bunch of young guys who hadn't worked for years in the corporate world.

The Morning Brew story

Kathleen: Tell the audience a little bit about what Morning Brew is and what makes it different than other newsletters? Because I think that's important to this.

Tyler: Yeah. So what Morning Brew started off as is a daily business newsletter that makes business news engaging and enjoyable to read.

What the co-founders found at the time, they were both University of Michigan students in the business school there, that typically the resources that the students were using were The Wall Street Journal and a bunch of incumbent traditional media companies.

They created a lot of content, but as far as our demographic goes, like a younger 18 to 34-year-old millennial, new in the workforce, it wasn't the most engaging content. So they started off by creating this daily email newsletter.

Since then it has expanded beyond just a single daily newsletter. We have a few other verticals. We have Emerging Tech Brew, which is all of the emerging tech. Retail Brew covers the retail industry obviously, and then The Turnout, which is a politics and business intersection newsletter.

And then from there we've also launched a podcast Business Casual, which is a weekly, interview-focused podcast of like CEOs, founders, et cetera.

So we're currently undergoing the transition from single daily business newsletter to a media company, and that's been exciting to be a part of.

Kathleen: I love that story so much because I think what's so fascinating to me is that email newsletters have been around for a really long time. And I think a lot of marketers when they think email newsletter, they think boring.

And I've always believed that one of the reasons email newsletters became so boring is because they became a little bit too easy to do "well" from like a formatting standpoint.

There's tools like MailChimp and Constant Contact and MyEmma that have given the average person templates and things that that made it really simple to send out a nicely formatted newsletter, but unfortunately what that resulted in was a lot of sameness and a lot of people just spitting out these newsletters that were, "Here's the latest four blogs we wrote." Really, really, really boring, check the box kind of stuff.

And so I think when I hear you talk about you guys coming right out of school and creating this, in some ways it makes all the sense in the world to me because I think it almost takes a group of people who haven't been steeped in the way it's always been done to recognize that the way it's always been done sucks.

Tyler: Yeah. Well, there's a few things there.

I think email actually is very hard, in a lot of senses, especially aesthetically. So you mentioned how terrible email newsletters traditionally look. There's a lot of limitations to like what you can do in email. Like you can't have video, you can't make it look... I think Morning Brew does a good job of making it as good looking as an email can, but it is very difficult to play with and there are a lot of limitations there.

So when people got used to digesting and consuming content online, the flexibility on the web is so much beyond what you can do in email.

So I think that's one reason why at least aesthetically email doesn't live up to living content online.

But then the other thing you hit on I think is really important, but a lot of these media companies monetize online through banner advertisements, and people display ads, and so their email newsletters were really just a drip of links to drive you back to their website, which if you are in your inbox and trying to consume content, that's not an ideal experience.

That's an angle we took. We are very unconventional.

I think you hit it pretty much on the head where when we started off there were two founders who did not have a media background. Our first writer was not a journalist by trade and so we never really did things how they were traditionally done. We were challenging the status quo from the get go. We didn't monetize. We still don't have internet on our website.

Our website's not monetized at all. Right now, even though we are 100% ad-based, which we're looking to change, all of our advertisements are natively created in-house and put right within the newsletter.

So that just flips the traditional media model on its head and we're just email first and have been hyper-focused on that. And I think that's just led to like a pretty interesting product.

Morning Brew's growth

Kathleen: Yeah, I have like a thousand questions I want to ask, but I want to make sure that we do some table setting for people listening, especially if they're not familiar with Morning Brew. So tell me when exactly did they start the newsletter?

Tyler: So they started as two undergrad students at University of Michigan in 2015. One, Alex Lieberman, the CEO, he's a few years older than Austin, so he graduated and worked a full time job at a trading desk for two years while Austin was still at school. And then when Austin graduated, Alex quit, Austin moved to New York and they went full time with it, I would say March, 2017.

Kathleen: Wow. So that was like what, two and a half years ago, not that long ago. And how many subscribers does Morning Brew have today?

Tyler: Right now on our daily newsletter, we have 1.8 million subscribers.

What makes Morning Brew special

Kathleen: That's insane. So if you're listening and you have a newsletter, think about how many subscribers you've added in the last two and a half years. And I'm betting it's nowhere near almost 2 million.

Like I said, I've been following you guys for a long time. You've published some really good content on how you grew Morning Brew, and the thing that I love about what you've said, and it's something I strongly believe, is that all of this growth, you can have the best growth hacks in the world, you can be an awesome marketer, but... and this applies really to marketing anything.

If the product stinks, it's not going to work. Right?

And so I'd love to just start out by talking about the product itself and what makes the Morning Brew email special and so appealing to the people who read it.

Tyler: Yeah. I think it really starts and ends and all the credit goes to the content team.

The writers that we have on staff here are incredible. They have a certain sense of like wit and humor where they can combine that aspect of writing and creativity with also like a deep understanding of what's important in the world, what is this news is actually relevant to our demographic and generation and so be able to fully understand the business landscape, take the top five, six, seven stories any given day and then throw some creative like whoever, what do you spin on the story to make it interesting and engaging for people to read?

I think it's like the total package, and I know that's something that we focus on, so that's not my thing, my domain on the content side of things, but it has been a struggle to hire for, just given that there are a lot of very funny, clever people that don't have any sense of the business world and like economics, finance and everything in that realm.

And then there's obviously the inverse of that of people who are super well-versed in finance and business but don't have the creativity to take these different stories and news topics and turn them into something extremely funny and engaging.

So I think we've done a great job recruiting and hiring people who are extremely talented and smart. And the product itself shows when you read it.

The importance of great content

Kathleen: Yeah, it really does. There's a very distinct tone of voice and it's very consistent. And you touched on that earlier and I found this out because I actually reached out months back about advertising.

And one of the things that I talked with, I don't remember who I spoke with, but whoever that was, we talked about how when you work with advertisers, you establish what the objective is. Is it brand awareness, is it lead gen, what have you. And then the advertiser supplies information, content, et cetera.

But really your team in-house creates whatever is going in the newsletter. You're not like, copying and pasting stuff that an advertiser is giving you. And it seems like that allows you to really create native ads that are going to appeal to your audience. Because if they're subscribing, they already like that tone.

So can you talk a little bit about that?

Tyler: Yeah, for sure. So right now our ad and copywriting team is growing like wildfire. We have two in-house creative copywriters right now, hiring two more that are joining in the next few weeks.

Essentially, that is one of our value props to advertisers and partners, that you give all of the key messaging points and initiatives that you want to be promoted and our internal creative team that works separately from the content team, so we do have a separation between content and the advertising and copywriting, but they're trained in the same manner to have that same type of wit and creativity on the copy with the advertisement.

And so that's something even when I first started reading several years ago, that it was hard to differentiate just because it's written with the same tone, like the difference between a story and an advertisement, the wit and the creative thoughts put into the pieces are very similar.

Obviously there are disclaimers. That one is an advertisement and the rest are stories, but outside of that if you were to read them blind, they do blend into each other pretty well, which is great for advertisements as they get incredible performance and engagement with all the ads that we create.

And it also doesn't seem out of place in the newsletter itself, where we have this pretty consistent on invoice and then advertisement that's either like a disgusting banner ad or something that just seems very out of place.

So it's all kind of one cohesive product.

Kathleen: It really makes all the sense in the world just intuitively because you guys know your audience better than any advertiser ever could. So to think as an advertiser that you could do a better job of really resonating with that audiences is a pretty audacious thing.

So it's pretty logical, but it's interesting to me how few companies do that, that really create the content for their advertisers. That seems like an interesting differentiator.

Morning Brew's email newsletter design

Kathleen: The other thing I wanted to ask you about before we get into like all the growth strategies, is just the aesthetics and you mentioned this also about how when you're creating content on the web you have a lot more in terms of options for how you aesthetically design something. But with email there are a lot of limitations.

This something that I've spent a lot of time thinking about, again, because I think that there is a ton of sameness, especially with emails, where due to the proliferation of templates, a lot of them are like picture to the left top, each of the right link or something along those lines or picture, copy, link, picture, copy, link.

And what I found is that a lot of email newsletters gratuitously include visuals that don't add any value like stock photography and things like that because either they think they have to or they somehow think that people want to see a more highly designed product.

And what I've noticed, at least in my own case, is that when I open my email client and I use Outlook and Gmail, one personally, one for work, all of my email clients are set by default to not show images.

So you open it up and all of those things people are adding in thinking this is going to make the experience better, they're not showing anyway.

You have created a very minimalist experience that still has design elements but they seem to be more intentional. So what is the strategy behind that?

Tyler: Yeah, I guess it starts with the template itself. So we don't use like the drag and drop that you see in most email service providers. We have like, a custom HTML template that we've like... You'd be surprised at how long it took to get to any final decision with the design of that. It went through like months of iteration of testing different colors, different themes, the different shadows which we have now.

If you've been reading Morning Brew for several years, you've probably seen our newsletter template change significantly, like three different times.

The most recent update that we did, I would say in the fall of 2019, so not too long ago, we went with like 3d card within the shadow type aesthetic. This is obviously all pending on what like email client you're using. Outlook is the laggard of the email world and so it's fairly ruminating.

As limiting as email is, Outlook is like a decade behind every other email client, so that's very frustrating. Like we used gifs to give it in our emails as well and Outlook does not provide the functionality to play gifs, just as one example.

But yeah, initially, we designed our website last summer and we had that card 3d aesthetic with the website and to build that consistency with email product as well, we mimic that in the newsletter.

What's interesting actually about a template is email isn't really supposed to have those shadows. So that wasn't really, not to get too technical, but a very hacky way to achieve that, which I think is pretty unique in newsletters and not many other newsletters I follow have a style similar to that. Yeah.

Ultimately what we want to do is provide various aesthetically pleasing experiences but not something that would take away from the content.

So that's just a constant battle. We have two in-house designers that are tremendous and then we obviously have a content team and the design likes to flex their muscles and build the coolest looking email product or any product that we release.

The design or the content team knows what's most important at the end of the day is being able to cohesively read the content and not let the design distract from what's actually being written.

So it's a lot of just like finding the right balance there. But I am very confident in our current design. I'm a huge fan of it. It's really just making sure it looks good, and now looking at every other email client.

Kathleen: Yeah, yeah. That is a tough balancing act, trying to get something that's going to work across email clients.

Optimizing email images

Kathleen: Although I have noticed a little hack that I think you guys have used and a few other newsletters I follow have used, which is the alt text for the images or the gifs that you're putting in the emails. You can be really strategic about what you put in those and instead of like describing the image, it could be like, "Turn your images on or click if you want to see this." It's almost like you can make your image alt text a call to action to get somebody to look at it.

Tyler: Yeah. There's a few reasons we do that too. The way that I'm sure we'll get into this with the growth and everything, but the main metrics that email looks at because its fairly limiting, is how many unique opens you get from your reader base.

And so the way that opens are calculated is like there's like a small, like one by one image pixel placed in every email, which isn't unique to us.

This is like what every single email, whether it's an email newsletter or eCommerce like Amazon or or whatever, everyone just, they place these small pixels into an email and once that image loads it like fires essentially the pixel, which is how you can calculate whether or not someone opened their or never opened the email.

So people who have their images disabled like you make it impossible for us to tell if you actually open the newsletter unless you click on a link.

So that initially was like a growth hacking type way. We used to have the alt texts over and just say, "Please turn on your images." One, because we think it enhances the experience because our images are actually designed to enhance the experience and go along with the content that we're creating. But it also means if you turn on your images, we can track that you're opening the newsletter and thus to tell that you're engaged.

We did get some negative feedback from I guess visually impaired readers who found it offensive to say, "Please turn on your images." So I think we've moved away from that, but that was the thought process, start finish with having that as the alt texts.

Kathleen: Yeah, that's definitely a trade off because the visually impaired person doesn't get any value out of, "Please turn on your images."

Tyler: Right. It's still a learning experience.

Morning Brew's email subscriber growth

Kathleen: Yeah. All right. So switching gears over to the growth, it's been unbelievable. So when you first came on there was like 100,000 subscribers, I think.

Tyler: Yeah. Yes. Around that-

Kathleen: And now it's almost 2 million.

Tyler: Yeah, it's been fun.

Kathleen: In under two years? It's pretty unbelievable. Can you maybe like... Let's start with big picture. What were some of the key leavers that drove growth for you in that time period?

Tyler: Yeah. And I'll start off by saying since about a year ago we hired new people in the growth team and I've actually moved towards the product in tech. So I don't want to say that I have done everything for growth but when you specifically reached out in the referral program is something that we are pretty well known for, which is what the article is about. That is something that I built in the early days.

I just wanted to make sure we gave the proper shout out to the growth team is doing an incredible job right now.

Kathleen: Absolutely.

Tyler: Yeah. When I first joined, we didn't turn on paid acquisition until early 2018, so the first six to eight months when I was on the team, it was all about taking our current audience of 100,000 subscribers and seeing how we can incentivize them to share with other people.

We gave away lots of awards, which have gotten better over time, but initially it was really just, "We have this subset of 100,000 readers, what can we possibly do to encourage them to share it with other people?"

We were partnering with like clubs on campuses, and what we'll get to as we created this like "share with friends" section within the newsletter and on the website, that has been unbelievably effective and it really just came out of necessity.

That's one big thing that I think our founders did an incredible job with, didn't raise any large venture funding. So rather than saying, "Let's raise $5 million and put it all into acquisition and just burn through money to grow," what that forced us to do is we wanted to make the product as good as possible so people would only share the newsletter if it was inherently good.

And so the content team did a tremendous job of making sure that our readers were engaged and then also, instead of focusing on just burning money on Facebook and Instagram and any other growth acquisition channel, it forced us to grow organically and focus on this referral program, understanding our readers, what incentivizes them and what are the different levers and triggers we can pull to have them go from a casual reader to someone who works with their entire network.

Building a subscriber referral program

Kathleen: Yeah. It's a great point about having to get creative if you're not taking venture capital. I've seen a lot of newsletters that have had referral programs. I think yours has stood out because of the comprehensiveness with which you promote it, how easy you make it to use.

You've written an article on Medium about this that has a lot of detail that I thought was really interesting because I think the concept of creating a referral program for your newsletter is, it's appealing, but the actual execution can be pretty daunting. So can you talk about how you set that up?

Tyler: Yeah, I'll skip over the technical details because those aren't too exciting to talk about. But at a very high level, every user has a unique referral.

They are incentivized both in the newsletter and on the website. So we created two different hubs.

The sharing and referral process is built into the product itself. So in every single day's newsletter, towards the bottom there's a Sharing section which has, and it's like customly created, depending on how many referrals you have to say you have point referrals, you are only X referrals away from the next reward, as sort of like a character and stick or whatnot to kind of incentivize you to continue to share.

It then gives you a referral link which you can tap and share with your network or there's a button that says, "Click to share." And so that's really the action we want you to take.

If you click on that button it takes you out of email and onto our website to your own like referral hub, is what we call it.

And obviously, as we've discussed, the flexibility on web is a lot more advanced than within email. So once you get to that hub on our website, you have all of the rewards and their programs like listed out for you, and that's the incentive part.

We have several levers in terms of you can share on Facebook, Twitter, LinkedIn, WhatsApp, SMS, whatever, and buttons to do all of that.

And then it even has an invite people via email feature. So you can import your contacts from Gmail, Yahoo, AOL, and then send emails just by tapping on your contacts, which we already have a pre-written blurb. You can customize that if you'd like.

And all of those different levers include your referral link.

And so really it's a combination of educating readers that the referral program exists, incentivizing them with the different rewards that we have, and then providing all the tools that people have asked for, whether it's Facebook or Twitter or email, and making it as streamlined and easy as possible to get their referral code out into the world.

Kathleen: Yeah, I feel like there's like two halves of this. One half is if somebody decided to refer, making it super, super easy. And I love that you guys have so many options for like hitting a button and sharing it or importing your contacts or... You've basically given every possible option somebody could want, you have a solution for it.

But the other half of that equation is getting somebody to want to do a referral in the first place, because most people with most newsletters you see a lot which is like forward to a friend or share with a friend but no one ever clicks those.

The thing I've noticed about Morning Brew is really two-fold. One is you have done a great job of having that module at the end of the newsletter and that makes it really visual. You always can see like what are the things I'm going to get if I hit this button, which is very effective.

And then you mentioned those periodic give-aways. True confession, that is totally what got me to refer for the first time. I think you had one, it was a while back. I think it was when you were doing the giveaway of a trip to Singapore and I was like, "What the hell? You never know."

Tyler: We were still working that way with the guy who won that. They are going on a honeymoon I think in a few weeks.

Kathleen: Oh that's amazing. Yeah. I never won anything but I was like, "I'm going to post this link to Facebook and have three people sign up. I'll get entered and can't hurt." Right? So I'm somebody who never ever does those things and it got me to do it. So it was definitely that.

Tyler: There's a few things there. One, it starts to end with the product itself because we are content and we're written in a certain voice and tone, we are supposed to be your best friend in email.

So something about what the content team does really well is making you feel as if we are like, we kind of know each and that brand affinity that we've created is probably our biggest asset.

If you can have all these different types of rewards, but if you don't really align with the brand itself, I'm not incentivized to wear a shirt or have a coffee mug of a company I really don't care for.

So it really starts with the content and just creating something that people can align with. So that is definitely first and foremost.

Beyond that... Yeah, the goal is to get people to their first referral because 90% of people don't ever share. And I think that's just like the nature of most people aren't trying to be that annoying brand advocate that is posting in every group chat and on LinkedIn about this different service or product or whatever.

And so I think it's hard to get someone to make that commitment to initially share the newsletter. So that is ultimately the hardest thing we do, is taking someone from zero to one.

Once you get someone to a single referral, it confirms a lot of different things. It shows that they know that it verifies that they know it exists. So they are fully aware that you have a referral program, which before they ever shared, you don't know if they ever make it to the bottom of the newsletter or they're skipping over the different sections when you do reference that referral program.

So the only way we are 100% positive you know it exists is after you have shared. It shows that they know how to share.

So they have either copy and pasted it or posted on Facebook or shared on Twitter, but they have chosen their preferred action of how to share the newsletter and it confirms what they know how to, it shows that they are incentivized by the rewards because if they weren't incentivized, very few people do it out of the goodness of their heart unless they really think it would benefit a friend or family member. And then they've already received some sort of gratification.

So after you share the newsletter, you receive an email saying like, "Thank you so much for sharing whatever, whatever," and acknowledging that they have taken that action.

So because it confirms and verifies all of those things, the way that we can approach readers that have already shared a newsletter is entirely different than to people who have never shared.

So that again is like the hardest thing that we do is just getting that very first referral and from there it becomes a lot easier to go downhill.

Email nurturing for new subscribers

Kathleen: Now, speaking of that first referral, I thought it was really interesting that you recognize that somebody is most likely to refer at the end of their first week of being a subscriber because that's when it's still new to them, they're excited, they're starting to see the value.

So you guys introduced an email, I think it was like around day seven or eight, is that right?

Tyler: Day seven. And I think we can do a better job of testing that. That was a hypothesis we'd had a while ago that two or three days seems too soon, after the novelty wears off, like two or three weeks, it seems like you may have missed the bright spot of where they're most likely to share the new newsletter.

We've set upon seven days, we've done some tests around that and previously it has confirmed that seven worked best for us. But I think we can always go back and reevaluate that.

We can also get a little bit more creative with it and rather than being set days on your first seven days, you may only open one newsletter, you may open all six newsletters, maybe we do it based on how many emails were opened rather than a set period of time.

But yeah, we've been testing that one day email and there's just so many things you can do there. Where that is initially, we have a small section at the bottom of the newsletter that introduces the share off section and tries to encourage people to share.

This email is the only, I guess, it's put spam email that we really send kind of unsolicited, but the value is clearly there because a lot of people do acknowledge it, take the action, start to share the newsletter.

So the ROI of the email is 100% worth the 1% of people who get annoyed that it's a bit spammy, but it also is just a full email dedicated to our referral program, what they can get out of it and the different rewards, incentives and everything else.

Kathleen: Now, one of the dangers of having a referral program, especially when you're trying to get new email addresses, is people can give you a lot of garbage., don't email

I've seen like every iteration of clever fake email, so how do you guys deal with that?

Tyler: Yeah. Up until two years ago we didn't really do much with that. We just trusted that people were genuine, nice people, which is not always.

Kathleen: Sadly the world is full of people who cheat.

How Morning Brew approaches email list hygiene

Tyler: Yeah. Once we started to put more investment into our rewards and they were actually like higher quality shirts and nice pull necks, et cetera, we put into place like a double opt-in type thing, which is pretty common.

A lot of emails, whether you are signing up like an eCommerce platform or a newsletter, a lot of them require you to double authentic from your email.

So basically if I were to share my referral with you, you sign up, you actually aren't on the email list and I don't receive credit until you check your email and confirm that that email does exist. Once you do that, then you're added to our normal daily lists where you'll receive the email regularly. I'll receive credit and that's how that process looks.

There are still people who use like temporary emails or disposable emails. They'll play with the period with their email.

There's a bunch of different tricks you can do, but me personally, I get email alerts every time someone hits a milestone and it lists out every email that they've referred.

And so it's very easy to identify patterns of people trying to play with the system and we have a list of 700 fake emails that we check against before you put it in. And that list grows every day by every person who tries to hit the system.

So our like defense mechanisms I guess are constantly getting better and no one gets through the system now, which is good. You might-

Kathleen: That sounds good.

Tyler: ... [crosstalk 00:32:37] momentarily but we'll catch you, bump your referral count back down to zero and we will add those fake emails to the list of forbidden emails.

Kathleen: Yeah. I imagine that the double opt-in process results in some real people deciding not to follow through and so it probably like has lowered your conversion a little bit.

But did that hit you took... was that made up for by the improvement in the quality of the subscribers you got?

Tyler: Yeah. It was definitely a trade off. I think when I first joined we were just growing at all costs, especially when we started using paid acquisition and any bit of friction to joining the list was 100% against what we wanted to do at the time. So it was a trade off adding a double opt-in.

What we've seen is the conversion rate is like over 85% I believe the last time I checked. So it is very high.

And then one thing I actually wanted to bring up earlier in terms of consumers and subscribers or whatnot is the focus that we've placed on quality over just the vanity metric of total subscribers.

We actually have over 4 million emails, but we've turned over 2 million, just because there's a lot of either competitors or companies that would boast about their top line subscriber number, which sounds great for a newsletter article or something online, but in actuality, if someone hasn't opened in six months, there's absolutely no value for them to be on your list and without completely nerding out on email, it actually makes your email harder to be delivered to the inbox because believe it or not, Gmail is very smart.

And so when they know that you have a 50% open rate, they're going to send more of your mail directly to the primary inbox because it's something that people clearly want.

If they see your open rate is 5%, they're going to send more of your mail to spam because obviously not many people want it.

So it's like a virtuous cycle and it works against you if you have people on your list that aren't opening. So we have very strict turning practices.

So that's a very long winded way of answering your question of, yes, it has lowered the absolute conversion rate but it does ensure higher quality and at the end of the day that's what we're looking for.

Kathleen: Well, and I would imagine as a business that's really... the revenue model is from advertising. It's almost more important to have engaged subscribers than it is to have like a larger number of subscribers because as somebody who looks at advertising, I'm not just looking at how many subscribers you have, I'm looking at like what's your track record of clicks through to get a sense for what I can expect from a traffic perspective. So I could see where that would be really critical.

What is your rule of thumb for how long you let somebody stay on the list inactive before you clean that up?

Tyler: Yeah. We actually have like two different filters. One is on the... we call it like the filter, which is when you first joined the list, if you don't open in about three weeks, we send you a, "Hey, you signed up for this three weeks ago, you haven't opened any newsletters. Are you still interested?"

And if you don't respond that you're interested, we will remove you within three or four days after those three weeks. And that's a little bit more uncommon I think.

But we do have a fairly large paid acquisition budget, so that gets any garbage emails out really quickly if they don't start engaging from the get go.

And then on the back end is what most companies, traditionally it was just like a reengagement campaign. And for us it's two months.

So after 60 days, if you have not opened a newsletter or clicked anything in 60 days, we'll send an email checking-in on you. And if you don't engage with that checking-in email, then we will remove you.

So we're getting rid of subscribers on the front end and in the backend.

How referrals drove Morning Brew's growth

Kathleen: Got it. All right. Well, I feel like we could talk about this like all day long, but I want to zero in now on what was the impact of that referral program?

So you've grown considerably. You mentioned that you started including paid acquisition in the mix. What portion or percentage of your total subscriber growth can you attribute to referrals?

Tyler: Yeah, a lot. I think to date we've had over 250,000 people refer at least one person, and so that is individual people. Many of those people have dozens if not hundreds of referrals. So it's definitely a good chunk of our growth and it comes at a very competitive price.

So for paid acquisition, it varies channel by channel, but like a new email lead should be anywhere from like $3 to $6 or potentially more.

Our referral program, like let's say stickers is the reward, you get five referrals. We pay for those five referrals less than 25 cents per acquisition. So if you were to compare the cost of the acquired users through a referral program versus any of our paid acquisition channels, it's a fraction of what we pay.

Also, as I'm sure you would imagine, referred users are typically pretty highly engaged because they have been double opted-in because they came from someone, whether it's a friend or coworker or family member recommending the product.

And so there's just a lot of alignment in terms ending up being a highly engaged reader and people who are referred are also more likely to refer other people. So it really is this virtuous cycle of higher quality, more likely to refer.

The ROI is incredible and because people are sharing on social networks, even if it doesn't lead to a direct conversion, that exposure that we're getting in like your Twitter feed or Facebook or whatever else does add impressions to people who will hopefully eventually join us.

Lessons learned from Morning Brew's experience

Kathleen: So two follow-on questions. First is, knowing what you know now, is there anything you would've done differently in the referral program if you could rewind the clock?

Tyler: Yeah, a few things. Two stand out.

One is the rewards that we came up with. We came up with on our own initially, I think, and that was before we knew the success that would be, and obviously we can and have changed the different rewards, but I would recommend with starting by talking to your users and readers or whoever and really identifying what their pain points are, what their interests are and what would really incentivize them to share the newsletter.

I think just people have a hard time talking directly to their users. It almost seems like too intuitive and too easy to do, but especially in email, you're always a reply away.

So responding to a few different readers and just seeing what incentivizes them, I think it really boosts the effectiveness of a referral program.

The second thing is while some of the rewards are like additional content, so at three referrals you have Light Roast, which is like our exclusive Sunday newsletter, which comes at no additional cost to us, which is great in regards to ROI.

The management of the swag. So we also have a lot of physical swag and so that's something we didn't really plan for. And so at one point our office was half desk, half boxes of swag, and we got a bunch of interns from NYU to come in and help out with that.

We actually outsource that now, but that was a huge headache and something that as we grew pretty quickly and the referral program grew in effectiveness, we didn't really have a plan to actually store, ship, manage and be on top of this entire swag operation, which became the biggest headache that wasn't initially a part of my job. So that's something to think about in advance.

The future for Morning Brew

Kathleen: Yeah, those are good pieces of advice. Second question is, looking to the future, and I know you've shifted in your roles, but I'm curious if you have any sense of, given where things stand now, what does the future look like in terms of the referral program and other acquisition channels?

Again, you mentioned that you guys are doing some paid acquisition. Is the referral program going to still be a part of the plan and how is it going to evolve?

Tyler: Yeah, I don't foresee the referral program going anywhere anytime soon. It's been so quarter growth and it really just assists with everything else. It's a huge boost in the business in general.

It's pretty mixed. We have a fairly large paid acquisition budget, which consists of everything that you'd expect from Facebook, Instagram, Snapchat, Twitter, buying ads on Google, Gmail and other newsletters even.

But the referral program has been a huge success and I think from there, it's really just focusing on how can we continue to optimize it.

So for better or worse, it is a little hands off or it can be so we can go months without touching it and it really just operates on its own. Everything is set up with automated emails. It's built into the newsletter template itself. It really does run by itself, but there's so many different triggers and parts of the funnel that you can optimize.

So that one week email that we check-in on that first week that you can change the subject line. You can change the days until you receive that email. The copy itself, you can incentivize Light Roasts or stickers or you can incentivize all of the rewards and just test the different copy there.

You could also throw in like a second email somewhere down the journey and then at each milestone, like when you receive stickers, we send an email asking one, for your information so we can send the stickers to you, but then also incentivizing you to hit that next milestone, which is the bottle opener at 10. So it collects information but then hopefully shuts you down the funnel.

We can test each one of those milestone emails at different ways in terms of what we're incentivizing you with, what's the language we're using, what's the subject line?

So there's like an infinite amount of levers we can pull with that. It really just becomes an opportunity cost of just 1% here and 1% there add up to hundreds or thousands of new subscribers per day or per week or is it fairly maxed out under other levers that we can spend our time pulling?

Kathleen's two questions

Kathleen: Yeah, that makes sense. All right, well we're going to shift gears now because if we don't, we're going to run out of time.

So there's two questions that I always ask all my guests and I would love to get your answers to these. The first is really this podcast is all about inbound marketing. Is there a particular company or individual that you think is really killing it right now with inbound?

Tyler: Yeah, to be honest, I struggled with this question.

Kathleen: Oh wait, why did you struggle? Because you don't think that anybody's doing it well or-

Tyler: Not that, but I feel like it's such an integral strategy for so many different companies and the thing is like the better you are at it, the harder it is to tell that it's a part of like this larger ecosystem strategy, and so everything kind of blends together in terms of like a content strategy, but really it's a top of funnel inbound approach to have you go down funnel and make a purchase or join whatever it is.

And I think most modern companies focus so much on doing both that it just becomes really hard to tell where you are in the funnel and what their actual true incentive is. Although usually it's always just to get into your wallet and have you pack your things.

What helped me actually on our podcast, Business Casual, we just recently interviewed Gary Vaynerchuk or Gary Vee, how a lot of people refer to him.

I personally am not a huge fan of the content, but in listening to the episode, I actually did think he made a lot of very creative, also in terms of he produces so much different content natively on all these different social platforms and explicitly does not plug his products or anything down funnel on purpose because his goal is to build an audience that trusts him and really engages with his content, knowing at some point you will make the leap if you really are aligned with what he's saying and his messaging, find the products down funnel, but he wants you to eventually get it to him.

But I did think it was interesting when he was talking about how a lot of his friends and competitors in the space think that he's an idiot for not explicitly calling out his products and really using these channels that are getting millions of video views to promote products. Rather he refuses to promote his products. And it's kind of playing the long game and his inbound marketing strategy of just creating good content very consistently.

So regardless of whether or not, I'm a fan of the content, I thought that his approach to that was pretty clever and pretty interesting and he seems to be doing very well. So I would find that to be pretty successful.

And then another one that I just... I love Airbnb as a company and always have, but Instagram is great for a lot of brands. Airbnb is unique because everyone loves vacation, everyone loves getting away and the way that they create and post mostly on Instagram of all of these also houses and these destinations around the world. But really it incentivizes you to go onto Airbnb, look at those and then hopefully book them. I just thought that was an interesting inbound strategy.

Kathleen: It's so funny that you call that out because I have totally gotten sucked in to going to the Airbnb website because I see like a picture of a tree house or something and I'm like, "Where is that tree house? That's so amazing. I want to stay there." But then I feel like I get to the site and I can never find those cool houses. It's like-

Tyler: Yeah, so if you follow them on Instagram, I'm pretty sure that they tag the place or at least makes it a little easier to find. But yeah.

Kathleen: Yeah, they have some awesome properties. Now, the Gary V example is great because you're right, like you don't have to be a fan of the content to appreciate the approach.

And that's the thing. You talked about how Morning Brew's really becoming a media company and at some point there was a place I used to work that was making that transition to a media company. And we really looked at it as with media companies, you're building the audience first and then if you build a great audience you can worry about the product later.

And there are so many examples of that done well. That's the whole business model that Gwyneth Paltrow built Goop on. It was just really a blog in the beginning and now she has a ton of products that she can charge an ungodly sum of money for and people are just eating them up because that trust is there.

And so to me, that's one of the big differences between like traditional business marketing and media company marketing. Business marketing, you have the product first and then you try to build the audience. Media companies build the audience and then they introduce the product and that's like a really subtle but important difference.

Tyler: Yeah. That's really great.

Kathleen: Well, this has been so much fun. One last question for you.

The biggest complaint I hear from digital marketers is that staying up with all the changes in the world of digital marketing is like drinking from a fire hose. So how do you stay up to date and educated for yourself?

Tyler: Yeah. To be really transparent, I struggled with both these questions. I'm obviously in the newsletter space and I get a lot of information from different newsletters. Shameless plug, I think we are releasing a marketing group newsletter sometime in 2020 so that should be everyone's go-to resource when that launches. And-

Kathleen: You've heard it here first.

Tyler: I think I broke news here. But I'm pretty up-to-date on whether it's like different podcasts or different newsletters and there's not really just one that I stick to, my inbox gets 25, 30 different newsletters a day.

Podcasts I'm way too ADHD where I just jump from anything that's recommended but a lot of them are from like the business startup culture and like founder story type podcast.

And so through that I think it's just like I find like pure marketing material to be a little repetitive, where if you actually take a step back and see like some of these founders stories of how they grew their company to be very successful, a lot of the success comes from creativity and just being aware of the business environment and your surroundings.

And so what I've seen, there was somewhere... Like in a random example, someone advertised in a fortune cookie at a restaurant that I was in and just something like that that I would never think about, but understanding that anything could be an advertisement.

I really just think the more exposure you have very broadly to life, but like the different experiences and what different companies have done, I think you can almost turn anything into a way to share your message or to get your voice or brand in front of a select group of people.

You just have to be aware of the different surroundings and what has worked for other people.

So I'm not a huge fan of Facebook changed their algorithm and now marketers should shift X dollars to do this type of campaign.

I'm more interested in what other companies have done in town, very successful, and something that actually makes you think to share your message.

Kathleen: Yeah, that's a great point because I do think some of the marketing, educational content out there really contributes to group think. And if you're doing the same thing everybody else is doing, you might grow but you're not going to have exponential growth the way that you guys have.

Tyler: [crosstalk 00:50:16] one thing that we have always been good at at Morning Brew is jumping on new platforms or new ad units when they become available. So specifically digital advertising.

Anytime that a company like Facebook or LinkedIn or like for example TikTok would be the new example. Before that becomes absolutely flooded with every competitor trying ad placements there, you get a lot cheaper CPMs when you jump to it first.

So rather than waiting for everyone and their mother to tell you that this has worked really well, if you hear that there's a new ad placement product or medium, being one of the first to test, it has its ups and downs, but if you're creative I think there's a lot of success to be had there.

How to connect to Tyler and Morning Brew

Kathleen: Love it. That's a great tip. All right. Well, we're at the top of our hour. So if somebody wants to learn more... First of all, how can somebody subscribe to Morning Brew? Because that's the most important thing.

Tyler: That is the most important. So, our landing page's optimized for conversion. You can't do anything but sign up. So go to and sign up.

Kathleen: And then refer your friends of course, because you can get really cool swag and maybe even win a trip to Singapore someday.

And then if somebody has questions or wants to learn more, I will put the link to your Medium article where you go into a lot more detail on what we talked about today. I'll put that in the show notes.

But if someone wants to reach out to you, is there a great way for them to connect with you online?

Tyler: Yeah. So I'm also shamelessly trying to grow my Twitter audience. So I am @denk_tweets. It is my Twitter handle. So I respond to tweets.

My email is easy to find. It's just tyler@morningbrew for your responses to the inbox as well.

So either one of those, whichever you prefer, I'll be answering.

Kathleen: And definitely head to the show notes for those links because if you try to Google Tyler, you might accidentally reach out and connect with Tyler Denk who was a model on The Amazing Race, which I found out when I first tried to Google you.

Tyler: Yeah. I'm trying to beat him in SEO, so my name appears first, but I also talked to him funny enough from the SEO.

Kathleen: Yeah, and so maybe you can connect with both, but if you want the Tyler Denk who's at Morning Brew, head to the show notes for the podcast and I'll have all those links in there. Follow him on Twitter, subscribe to the Morning Brew.

You know what to do next...

Kathleen: And if you liked what you heard or learned something new today on the podcast, please also head to Apple Podcasts and leave a five star review for the Inbound Success Podcast because that's how we get in front of new listeners. That's it for this week. Thank you so much, Tyler. This was a lot of fun.

Tyler: Yeah, this was great. Thanks for having me.