Simple Formula to Calculate Ad Revenue for Email Newsletters

If you run a newsletter, chances are high you’ve thought about ads. They’re one of the simplest ways to turn your audience into a steady stream of income. But here’s the catch: figuring out how much you’ll actually make can feel like guessing in the dark.

I’ve talked to plenty of newsletter creators who get stuck here. They either undervalue their inventory or overestimate what advertisers are willing to pay. The truth is, there’s a straightforward way to calculate ad revenue for email newsletters—and you don’t need to be a math wizard to do it.

Here, I’ll walk you through:

• Why newsletter ads are worth your attention
• A simple formula/equation that anyone can use to calculate revenue
• Real examples so you can plug in your numbers
• What influences those numbers in real life
• How to grow and maximize your ad revenue

By the end, you’ll have a clear way to set realistic expectations—and maybe even see new opportunities hiding in your list.

Why Newsletter Ads Deserve More Credit

If you spend any time online, you know how tough it’s become to make money with ads on blogs or social media. Algorithms change, ad blockers cut impressions, and platforms keep more of the pie.

Newsletters flip that script. When someone subscribes to your email, they’re inviting you into their inbox. That level of trust is gold for advertisers.

Here’s why ads in newsletters punch above their weight:

• Direct access: No middleman. You control the relationship.
• High engagement: Even a modest open rate can beat organic reach on social media.
• Niche targeting: A fitness newsletter? Perfect for supplement brands. A SaaS newsletter? Great for software ads.
• Built-in trust: If readers open your email regularly, chances are high they’ll pay more attention to ads inside it.

And here’s the kicker: you don’t need a massive list to earn. A small, tight-knit audience in the right niche can be more valuable than 50,000 disengaged readers.

The Simple Ad Revenue Formula

Let’s get right to it without a lengthy introduction. The simple formula for measuring newsletter ad revenue rests on the CPM (cost per mille or cost per thousand impressions). 

Here is the formula:

Ad Revenue = (Subscribers × Open Rate ÷ 1,000) × CPM

Now, to briefly review the terms:

• Subscribers: How many subscribers you have in your list.
• Open rate: The percentage of emails that got opened by your subscribers.
• CPM: What advertisers pay for a thousand impressions (or opens).

This is simple: You charge for how many people see the ad and not for the actual number of subscribers.

Example: Applying the Ad Revenue Formula

Say you have:

• 12,000 subscribers
• A 35% open rate
• Advertisers willing to pay $25 CPM

Step 1: Multiply your subscribers × open rate = 12,000 × 0.35 = 4,200 opens

Step 2: Divide by 1,000 → 4,200 ÷ 1,000 = 4.2

Step 3: Multiply by CPM → 4.2 × $25 = $105 per ad slot

With two ad slots per newsletter, $210 per send. Weekly sends? That would total to $840 already in the first month. Fortnightly? $1,680 in the first month.

Now, these numbers are indeed very concrete, aren’t they?

Other Ways Advertisers Pay

Not every deal will be CPM-based. Depending on your niche and how you structure sponsorships, you might run into:

1. Flat fee sponsorships
   A brand pays $500 (or more) to be the sole sponsor of your issue. No formulas—just agreed terms.
2. CPC (Cost per click)
   You get paid per click. Example: $2 per click, and 150 clicks = $300.
3. Affiliate commissions
   Instead of upfront payment, you earn a cut of sales made through your link. High risk, high reward.

Each has pros and cons, but CPM is still the cleanest way to estimate potential revenue.

What Actually Impacts Your Newsletter Earnings

The formula works, but let’s be real: numbers on paper don’t always equal reality. Here’s what makes the biggest difference:

1. List Size

More subscribers generally means more openings. But a smaller, engaged list often beats a bloated, inactive one.

2. Open Rate

This is huge. Two newsletters with the same list size can have completely different revenue if one has 20% opens and the other has 45%.

3. Your Niche

Advertisers pay more to reach readers in certain industries. Finance and tech CPMs can be $40–60, while general lifestyle might hover around $10–15.

4. Placement

Ads at the top of the email usually perform better (and earn more) than footer placements.

5. Frequency

If you send more often, you create more ad slots. Just don’t overdo it—nobody likes spam.

How to Increase Your Newsletter Ad Revenue

Once you know the formula, the natural question is: how do I make those numbers bigger? Here are a few tried-and-true strategies:

1. Grow your subscriber base – Promote your sign-up form on social, your site, and even podcasts.
   
2. Improve open rates – Better subject lines, cleaner lists, and segmentation can give you a lift.
   
3. Sell premium placements – Charge more for top-of-email or exclusive sponsorships.
   
4. Mix revenue streams – Don’t rely only on CPM ads. Add sponsorships and affiliates.
   
5. Show advertisers data – Share past performance. When they see ROI, they’ll pay more.
   
6. Focus on trust – A trusted newsletter with consistent content commands higher CPMs.
   

Realistic Earning Benchmarks

So, what can you expect to make? Let’s run a few scenarios using a $20 CPM and 30% open rate:

• 5,000 subs → 1,500 opens → $30 per ad
  
• 10,000 subs → 3,000 opens → $60 per ad
  
• 50,000 subs → 15,000 opens → $300 per ad
  
• 100,000 subs → 30,000 opens → $600 per ad
  

Two ads per issue? Double it. Weekly sends? Multiply by four. You get the idea.

Mistakes That Kill Newsletter Ad Revenue

I’ve seen creators sabotage their earnings by falling into these traps:

• Including too many ads → Hurts reader trust and open rates.
  
• Keeping dead subscribers → Inflates list size but lowers engagement.
  
• Undervaluing your audience → If you are in a premium niche, don’t sell at bargain rates.
  
• Ignoring advertiser ROI → If brands don’t see results, they won’t stick around.
  

Conclusion

Newsletter ads are simple once we have understood the math behind them: Revenue = (Subscribers × Open Rate ÷ 1,000) × CPM.

Use this as a starting point and work on ramping up open rates and growing your list so you may charge what your niche is worth. 

If you treat your newsletter like a truly valuable media asset, advertisers will swiftly recognize that value, and what once was an inbox side hustle may just become a serious income stream.