Lessons from a failed business newsletter
The Latin Business Journal needed a revenue model to make it fly
You’re reading the Your News Biz newsletter. My goal is to help digital media entrepreneurs find viable business models.
Loyal readers know how much I emphasize building the financial strength of a news organization. An idealistic mission statement or cool product doesn’t help pay a top-notch reporter or editor unless money is coming in the door. And those talented people will leave you if you can’t pay them a living wage.
I usually write about success stories, but I thought it might be useful and educational to start the year with a story of a failed email newsletter. In 2013, seven years after I retired from American City Business Journals (ACBJ), the company hired me for a special project.
The idea was to design the content for an English-language newsletter aimed at Latino business owners and entrepreneurs in Florida, with the goal of expanding to other markets in the US with vibrant Latino business communities.
Editor’s note: There is a robust debate (read about it here) about whether it’s appropriate to use the terms Latino and Hispanic to describe people with roots in Spanish-speaking countries. I’ve made an arbitrary decision to go with Latino in this post. — James
The company had successfully launched an email newsletter focused on the energy industry in Texas and other oil and gas producing states. ACBJ’s competitive advantage was (and is) that it published local business weeklies in 40 cities (45 today) in every region of the country.
Industry-focused newsletters would allow ACBJ to dominate sub-markets. The goal was to attract advertisers who wanted to reach niches within niches rather than the entire readership of the business weeklies.
The Latin Business Journal
I’m fluent in Spanish and had worked as a media consultant and teacher for several years in Mexico and other Latin American countries. On this assignment, I interviewed dozens of small business owners and managers in the four Florida markets where we had weeklies -- South Florida (Miami), Tampa/St. Petersburg, Orlando, and Jacksonville.
At business functions, if you spoke Spanish, you were less of an outsider. It helped me make inroads.
At the ACBJ papers, I worked with publishers, editorial directors, sales and marketing managers, and reporters to design a product that would appeal to Latino business people.
Based on the research and collaboration, we developed some prototypes and began publishing weekly newsletters in the four markets. Nearly all of the newsletter content came from stories we had already produced but contained one of several elements — a Latino business or community leader, a company that targeted Latino businesses or consumers, import/export companies with ties to Latin America, or news about immigration policies.
The corporate headquarters in Charlotte supported us with email addresses of people who had agreed to receive our messages. We signed up several thousand free subscribers to The Latin Business Journal. I also created a once-a-week version with Spanish-language links to news from other Latin American countries.
The competition
We discovered we had a lot of competition for the Latino market. The most likely advertisers — telecom, airlines, financial services, tech companies, health insurers — already had invested significant money and time cultivating relationships with local Latino business organizations, chambers of commerce, and cultural organizations.
Beyond the U.S. borders, Latin American publishers had also seen the opportunity years earlier and had solid relationships with advertisers who wanted to reach the U.S. market.
It probably didn’t help that advertisers accustomed to print were reluctant to pay the prices we were asking for digital advertising. And our salespeople were not comfortable explaining the value of digital advertising. They made more money selling print and made it their priority.
I think that a sales and marketing manager more skilled than I could have closed some sales before the deadline -- six months -- set by the company for showing the newsletter could be profitable. And the cost of my fees and expenses had to be a factor in deciding to shut down the operation.
One possible conclusion
It's a cliche to say we failed but we learned a lot. Actually, that’s true. At least I did.
Among other things, I learned how incorrect the labels "Hispanic" and "Latino" are for people with roots in Latin America. They identify themselves by their home countries or even cities within those countries. They see themselves first as Cubans, Dominicans, Venezuelans, Mexicans, “chilangos” for residents of Mexico City or “paisas” for certain parts of Colombia.
Miami is a Latin American capital surrounded by Anglo suburbs. But in the last 10 years, the importance and use of Spanish has evolved, there are great differences among generations, etc.
It would take a new generation of publishers and editors to make a Latin Business Journal successful today. Over the next several posts I plan to explore what makes a financially successful email newsletter these days. I hope the posts inspire you.
A better conclusion
The Axios Latino newsletter, aimed at the Latino market in the U.S., has shut down after four years. This is significant, given that Axios is a data-driven, profit-driven company. If there were a market for a Latino-focused newsletter, you would think that Axios would have discovered it.
Was the Latino market big enough? Yes, according to the editors of the Axios newsletter. “Latinos make up 19% of the U.S. population, and that share will only grow as the country moves toward having no majority racial or ethnic group.”
But size isn’t everything. The characteristics of the Latino market might not have been right. Again, the editors themselves observed: “Latinos are also on average a lot younger than most other demographic groups, and, in the wise words of the late Whitney Houston, we believe that children are our future.”
This is pure speculation on my part, but Axios executives might have concluded that they needed a radically different product for this younger audience — possibly not a newsletter. And the distribution channels where young people consume news and information are YouTube, Instagram, WhatsApp, podcasts, TikTok, and other audio- and video-focused products.
But that’s just a guess. If I had the money, that’s where I would invest it.
Thank you for sharing this insightful post. I greatly value the opportunity to learn from projects that didn’t achieve their intended outcomes. Unfortunately, there’s often a reluctance to discuss so-called failures, even when they play a crucial role in otherwise successful ventures. I will be recommending this post as reading material for the postgraduate course I teach in Brazil on Media Entrepreneurship.
Really interesting, Jim. I have little relevant experience, but I gotta believe there's a way to make this kind of newsletter work. Thanks for sharing. I'm looking forward to those next several posts!