Paid Ads VS. Newsletters: Which Is More Cost-Effective For Client Acquisition?

Hey, Tommy here.

Today, we’re covering what is the most cost effective strategy for client acquisition comparing real life examples.

In today’s issue:

• Paid ads vs. Newsletters

• Real life costs breakdown

• Case study: When a niche is too small?

• And more…

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FROM THE WEB
Best resources for you

ICYMI

• 10x your writing instantly (LinkedIn)

• Easy way to offset newsletter costs (Beehiiv)

Engagement

• How to throw an event for your newsletter readers (Inbox Collective)

• Steal this email template to ask for reviews (ExitFive)

Growth

• How Tom Alder grew his newsletter to 55k subscribers in just over 12 month (Growth in Reverse)

• How HubSpot grew his media network blending editorial intuition with SEO (LinkedIn)

GROWTH STRATEGY
An in-depth analysis

My agency helped 10+ financial services firms grow their B2B newsletters. We acquired over 150,000+ combined subscribers. I've seen firsthand what works and what doesn't in financial newsletter marketing..

Let's cut through the noise and look at reali life examples with numbers.

Paid Ads: The Quick but Costly Route

Think of paid ads like renting a luxury office space. You get instant visibility, but the bills keep coming. Here's what our financial clients typically see:

• Average cost per lead: $50-75 (among all channels)

• Client conversion rate: 2-3%

• Real cost per new client: $2,000-3,000

Plus, the moment you stop paying, your leads vanish. It's like turning off the water tap – the flow stops instantly.

Newsletters: The Slower but Smarter Investment

Now, imagine building your own office instead of renting. That's what a newsletter is. Here's what we see with our financial services clients:

• Average cost per lead: $5-15 (can be as low as $1 but here a conservative example)

• Client conversion rate: 5-8% (higher trust built through valuable content)

• Real cost per new client: $200-300

N.B. Beehiiv’s newsletter subscribers LTV calculator: Subs LTV Calculator

But here's the best part – these numbers keep improving over time.

Why? Because of the value you provide each week.

N.B. 47% of buyers view 3-5 pieces of content before engaging with a sales rep. (The New York Times)

Real Numbers, Real Results

Here is a real life example with a wealth management firm:

Year 1 with paid ads:

• Spent: $120,000

• New clients: 45

• Cost per client: $2,666

Year 1 with newsletter:

• Spent: $24,000

• New clients: 52

• Cost per client: $461

Why Newsletters Win for Financial Services

Trust Factor

Your clients aren't buying a $20 t-shirt. They're trusting you with their financial future. Newsletters build trust slowly but surely. Every week, you're in their inbox sharing insights. No hard sell needed.

Consumer education is a key factor in this process (Psychology Today)

Longer Shelf Life

One of our banking clients still gets leads from 18 months old newsletter articles. Try getting that from a Facebook ad!

Higher Quality Leads

Newsletter subscribers who become clients stay longer. We see 85% retention rates versus 60% from paid ads.

Compound Effect

Like a good investment, newsletters grow in value. Our asset management clients typically see:

• Month 1: 0.5% conversion rate

• Month 6: 3% conversion rate

• Month 12: 7% conversion rate

Making It Work in Financial Services

Here's what works best:

Solve Real Problems

• Tax planning tips

• Retirement strategies

• Wealth preservation tactics

Show Your Expertise

• Case studies (without names)

• Behind-the-scenes looks at your process

• Common mistake prevention

The Smart Way to Start

• Pick one core topic (like retirement planning or wealth preservation)

• Write 1 article per week

• Keep them short (800-1200 words, aka less than 10 min read)

• Add one clear call to action

• Track your open rates and clicks

The Bottom Line

Yes, paid ads can get you clients faster. But newsletters build a lasting asset that gets more valuable over time.

Most of our clients now use both – paid ads for quick wins, newsletters for long-term growth.

But if you had to pick one? Start with newsletters. Especially to build lasting client relationships while keeping costs down.

Think of it this way: Would you rather rent a billboard or build a reputation?

Reputation always wins.

Have a look at this study by Harvard Business Review.

CASE STUDY
“How do I know if my newsletter niche is too niche?”

“The money is in the niches”

We’ve all heard it. And it's true until you take it too far. So when is a niche too niche?

The great thing about B2B is that there are a lot of data out there. To have a rough idea we use a tool called Apollo (not sponsored not affiliated).

You can create and account for free and play around with it. The goal here is to figure out how many people are within your specific niche.

If I’m targeting Italian founders of agricultural small businesses (1-10 employees), I’ve got 8 results.

N.B. we use the filter “Email Status: likely to engage and verified” for a more accurate search

In this case I clearly went too far. We like to niche down to a rough estimate of 20,000 people. That’s plenty to get traction and to eventually grow out of it if we saturated the niche.

Want your question to be answered in the next issue? Reply now to this email.

See you soon,

Tommy - founder at NewsLaunch.co