Doing Six Figures with a Local Newsletter

Geoff Sharpe is the co-founder of Lookout Media up in Canada. They have a string of three local newsletters, spread between Ottawa and Vancouver, and have grown to over 65k subscribers and six-figures in revenue.

Last week, he jumped on Zoom with me to share a bunch of what they’ve learned, including:

1. The Importance of Hard Editorial Decisions

2. Keys to Growth

3. Keys to Selling Memberships

4. Keys to Selling Ads

He gave me permission to write it all up, so that’s what we’ll look at today.

Even if you’re not running a local newsletter, a lot of this will still be useful. And if you are, I highly recommend connecting with Geoff - he' knows a ton about this and is really generous with his insights.

1. The Importance of Hard Editorial Decisions

If you’re reading this, you probably already know the fundamental rule of newsletters is, “quality first.” You can have all the growth hacks in the world, but if the stories suck, you’re just not going to get any organic traction.

That’s especially true if you’re heading into markets that already have other players on the field.

Ottawa and Vancouver both have hundreds of thousands of residents. There are plenty of existing news sources for them.

So one of the most important decisions Geoff and his co-founder Robert Hiltz made early on was how they’d be different.

Specifically, they focused on what they weren’t going to do.

“You’re never gonna beat a local news company at getting local news,” he told me. “But where you can beat them is having an interesting analysis and point of view.”

In other words, personality.

The Lookout team didn’t think Vancouver needed more listicles about “Five Best Pasta Places In Town,” so they decided to focus on deeper coverage of local news, events, and restaurants, with the goal of becoming a trusted resource.

If you’re going through this, give yourself time. Geoff says it took them 3-6 months of testing (publishing 3x per week) to really find their editorial groove. But now, three years in, the brand carries weight, and gets recognized on its own. That gives them the flexibility to bring on new writers or potentially even expand to new locations because they took the time to build the foundation.

2. Keys to Growth

Like most of the local newsletter operators I’ve talked to so far, Geoff and the Lookout team rely primarily on Facebook and Instagram ads to grow their audiences.

“You want to know my targeting for these ads?” he said, laughing. “The city.”

He keeps the audience targeting super simple, letting Meta handle most of the optimization on its own, and as a result, he’s seeing ~$0.60-$0.70 CPAs, with high open and click rates.

They’ve experimented with a lot of formats, but a few things he likes to test in ads include:

• Images of recognizable local landmarks

• Different “contrast messages” that tap into local identity or even tribalism (e.g. “If you live in XYZ, you won’t want to read this.”)

3. Keys to Selling Memberships

This was fascinating…

Like other local newsletter founders I’ve talked to recently, Geoff told me that it’s tough to scale local ad sales. Budgets are relatively small, and you spend a lot of time educating old-school business owners on benefits of a newsletter audience.

But Lookout compensates for that by leaning hard on paid subscriptions and he estimates ~75% of their revenue (!) is from paying subscribers right now.

That’s excellent from a business perspective because paid newsletters carry several unique advantages like:

• Increased Audience LTV: Readers become worth more, which changes how much you can spend to advertise to them.

• Diversified Revenue: Ad markets are fickle, and change with the wind. Having subscription revenue protects you from sudden shocks

• Recurring Revenue: Maybe the biggest benefit of paid subs - many of them keep paying year after year, funding your growth plans

Lookout offers memberships in either monthly or annual format. First year goes for ~$75, then the price increases to ~$120, which means they could lose ~30% of readers from year one to two and still earn more.

He told me that annual is better to focus on, since they find churn is ~2x higher on monthly subs, and for the Lookout group, he estimates ~85% of paying members are on annual plans.

It’s wild to hear that this is possible with local newsletters, but there you go!

Interestingly, I recently asked Farhan Mohamed of Overstory Media, how he would recommend I think about revenue if I wanted to build a $1m local newsletter in Austin, and he said something similar; Think about how to make ads 25% of the pie, and fill the rest with things like events, paid subscriptions, etc.

This 25% ad ratio may be a broader theme in the industry.

So how does Lookout sell these paid memberships? Well, there are two components:

• Get Clear On The Value: Insiders get access to content free readers can’t see, including their updates from city hall meetings, and long-form pieces on restaurant gems.

• “Support Local Media”: They lean into this narrative, and it works. Interestingly, I’ve heard this from other local media founders too - readers seem happy to pay to support quality local writers.

The highest-leverage time he’s found to sell paid memberships is 2-3 months in, after people have experienced some of the value and gained an affinity for the newsletter.

So, he focuses on quarterly sales drives. They make a limited number of memberships available at a discount, and lean hard on the narrative of why people should support now.

4. Keys to Selling Ads

Okay, so selling ads is hard. But you should still try it.

Geoff’s biggest tip was to do what you can to pre-qualify advertisers by making sure they have the budget before you get on a call with them.

They use Tally as their contact form. We used them at Hampton too because they have this cool feature where they can collect data from forms poeple don’t finish filling out. Can be super useful for you.

He reviews submissions and emails promising leads to set up a call.

Pro Tip from Geoff: Set up your sales flow so that anyone who doesn’t pre-qualify for a live call can still be funneled to an automated checkout where they can buy inexpensive ads in your newsletter without any face-to-face interaction.

Another major insight – keep it simple.

I’ve heard this from several other local newsletter founders too – a lot of local advertisers just aren’t as sophisticated as venture-backed tech startups or large global brands. They’re not used to seeing performance data, or measuring direct ROI.

That’s not a dig on them. It just means that when you’re selling you need to position the value differently than you might in other circumstances.

A lot of these business owners are used to buying ads in local newspapers, so Geoff often guides the conversation toward the problems those publishers are having right now.

“When was the last time you saw and clicked on a banner ad on a website?” he often asks.

When you frame it that way, people intuitively understand the issue, and it opens the door to talk about other types of advertising options.

For More From Geoff…

Check him out on Twitter, and if you’re in Ottawa or Vancouver, check out their newsletters here:

• Vancity Lookout

• Ottawa Lookout

• Capital Eats

A Few Just One Great Links

• Chenell’s deep dive on Codie Sanchez: I’m almost getting tired of saying this, but Chenell Basilio’s most recent case study is fantastic… again! She digs deep on how Codie Sanchez grew her audience to 250k+ in the first few years, including the unique way she used Twitter and Facebook groups. I know Codie, and had a front-row seat to her rise, and Chenell’s insights are spot on. So good.

That’s all for this week - I only include links I thought were truly great here, and this week, I was mostly offline. More on why soon.