Ben Young
Ben Young
April 12, 2024

Edition #444

Is Robinhood’s Sherwood News all about zero cost acquisition? CitiGroup appoints a Chief Marketing & Content Officer, and Uber adopts TikTok style content.

Big week of stories ahead, first up I discuss Robinhood’s foray into brand publishing.

Robinhood’s Sherwood News launched this week, and it seems to be about finance culture in general. They even had launch advertisers! See campaign of the week.

They said they want to staff up to 40 folks by end of year. Now that raises a super interesting question. Can this be a sustainable business? I decided to dig into it.

Let’s presume, that cost per head is $200k. That suggests a total operating cost in the realm of $8m. Hard to imagine what the set up / tech cost is, but maybe add another million. Circa $9m/year. Please do correct me if you think this is wonky.

Robinhoods overall marketing spend in 2023 was $122m.

Toolkits reports “Sherwood plans to be “entirely self-sustaining”, so they need to break even. You imagine Robinhood will want some return for their capital. And we know Robinhood revenue per user is about $81 (and growing). Lets say Robinhood have tipped in $5m for first years operations, presuming some revenue & early commitments from advertisers.

So how does Robinhood get a return? There doesn’t appear to be any ad load or links to Robinhood right now. But you have to expect there will be.

If they were to back this into, new users. And presuming they are willing to forgo the first years revenue for these users, or put another way a 12 month payback.

5,000,000 / 81 = 61,728 users.

So Robinhood might expect to get 61,000 users from this, to repay the capital.

How would they do that? Well with media placements on the site, maybe even as a regular advertiser. On that basis, you go, a 2% conversion rate, they’d need 3m or so clicks from Sherwood to repay the initial capital. And if Sherwood had a 2% click through rate on the ads, that would mean 150m impressions.

The numbers get big fast, for Robinhood to recoup their funds.

However keep in mind Snacks, the newsletter that comes with it already has 40m subscribers. At an open rate of 30%, and a CTR of say 0.5% – they can still push 60,000 clicks into a story. So these numbers are within spitting distance. BUT how many Snack users are already Robinhood customers. Unknown.

Back to Sherwood though, on an ongoing basis, if Sherwood covers its costs, the ad cost drops to zero for Robinhood. So it lets them acquire additional users at a much lower cost. Zero cost.

BUT elsewhere that also lets Robinhood spend more to acquire users, because their average acquisition cost has gone down. It makes them more competitive in the market. Given this has always been part of their sweet spot, their ability to attract users at a lower cost. You might say that this strategy fits in with their culture.

I caution, at this point, I have built up a bit of an argument on speculation. We don’t know the plan 100%, other than it is independent and meant to be self sustaining. And you’d imagine the team internally want to fiercely build out their own culture and outlet. But Robinhood has stayed involved for some reason right. They could have just spun it out and walked away. Their ongoing interest, indicates a plan. It’s not like, growing this and selling it would be material to their earnings.

Of note, there are other things Robinhood could do with this media space, they could use it to help expand spend with current users. If 10m of their users make up a chunk of the Snacks subscribers (which is likely). And they can execute something, that helps those 10m, shift or grow their spend $5 or $10 a year. Suddenly the equation is different. However, I’m not sure on the need to do this with an external entity, you can do that internally anyway. And Robinhood have teams in place for this. So I’m less inclined to say this is a drawcard.

And again these are just regular media objectives, that you end up paying the same market rate for, so the hypothesis still rings true. Robinhood may also be comfortable with the operation costing $1m-$2m/year on the basis, that that is still cheaper acquisition than alternatives.

It’s just interesting to think of, how you back this out into business value for them. It’s not like The Current with TTD, where it is just about industry chat. Sherwood News appears to be a genuine attempt at an independent publication.

A point worth dwelling on is culture, that is team culture. And it’s not media related, but I think it is a big part. Sherwood needs to build a culture of growth/hitting targets/being nimble. Which can be hard when you know that Robinhood will backstop any losses. Also staff will expect higher salaries, because it’s part of a listed company. And if they miss targets after a year, will Robinhood cover the losses? Or will they cut back? You have to imagine that Robinhood does cover any misses, for optics. But it does make for a dicey cultural challenge here. So this isn’t related to media/eyeballs but could be an issue with the structure. It also raises cross risk, if Robinhood has a bad time, is this an easy thing to cut support for…

Again, a lot of speculation from my part, but I do think you want to be able to squint and go, here is how this could be a golden asset for everyone. Either way I applaud it, I think it makes sense for Robinhood and for Sherwood.

Also, a reminder, Attention Happy Hour in NYC, April 25th. I’ll be there and I’m sure a bunch of much smarter folks too :D.

Notable stories this week

  • Robinhood (finally)l launches Sherwood News.
  • Uber is launching a TikTok like short-form video feed.
  • Blackrock vet Alex Craddock appointed as Citigroup’s First Chief Marketing and Content Officer.
  • Can attention metrics help news publishers increase revenues?
  • Medium explicitly bans AI generated content in its Partner program.
  • Using AI to get around AI detection.
  • Why is MrBeast leaning into X to expand the reach of his content? Older audiences on X.
  • Are we past Peak Subscription after all?
  • Snapchat makes changes to new ranking feature after parent concerns.
  • Snowflake and Snap partner to integrate clean rooms with conversions API.
  • Precision announces new integrated solution to deliver next-level native advertising.
  • Roblox partners with Pubmatic for video ad buying.
  • Why does Ad Tech still fail to spot and stop – MFA-Fueled Schemes?
  • Knotch unveils Knotch One, all in one content optimization.
  • US ad employment springs back, adding 900 jobs in March.
  • Adelaide announces AFP, Adelaide for Publishers. NYTimes a launch partner.
  • Publishers caught in the Crosshairs of Vendor MFA Tools.
  • Pubmatic and Instacart join forces to marry retail media data with programmatic advertising.
  • The future of advertising is entertainment.
  • [Long read] The tyranny of content algorithms.
  • [Long read] Peloton’s bumpy ride.
  • [From us] Strategic analytics.


  • Automattic acquires Beeper for $125m.
  • Dude Perfect scores more than $100m investment.
  • ID5 raises $20m including Transunion and Martin Sorrell’s S4S.
  • Apple inks $50m deal with Shutterstock for AI Training Data.
  • Puck acquires Substack newsletter Artelligence.
  • Outdoor Voices is on the market, expected bid $10m.
  • Hootsuite to acquire social analytics company Talkwater.

Campaign of the week

  • Sherwood News with Nasdaq. We predicted this at 45 seconds, about 25% below Finance benchmarks for branded content.

  • Byline putting a free library in the Ace Hotel. We predicted this one at 44 seconds, images & easy reading are helpful for engaging content.

View all 2024 best campaigns.

Smartest commentary

  • “This phenomenon is affecting those who earn their livelihoods by creating content on the Internet. Initially, it was the photographers, then the YouTubers I followed. They were once entertaining and intriguing, but now they seem to be pandering to the algorithms. The reality of the algorithmic world is that it rarely rewards brevity and excellence. Most modern media algorithms are tuned to reward engagement.“Om Malik, writer/investor.

Datapoints of note

  • Beehiiv email benchmarks have average open rates at 38.7% and CTR at 1.8%.
  • Instagram revenue was disclosed in filings, $32.4b in 2023.
  • In Gubbins LI poll, 57% of respondents said Targeting Data / Attribution is what is stopping CTV ad buyers from running successful campaigns.
  • Eclipse dropped internet traffic about 40% during peak moments.
  • Dave Morgan highlights they can only find $16b of the $25b of US CTV ad spend, where did the rest go?
  • Podcasters are collectively earning over $100m in revenue on Substack.

View all 2024 datapoints of note.

That’s it for this week.