A while back, I got a call from a publisher who was confused.
"Chris, we added 100,000 subscribers in the last six months. Cost per lead was great, under $0.50. But engagement is tanking, revenue is flat, and now Gmail is throttling us. What happened?"
I pulled up their data.
They'd spent $50K acquiring 100,000 subscribers through co-reg.
On paper, it looked like a win. In reality, they'd bought a list of people who would never engage with their content.
Here's what kills me: This wasn't a reckless decision. It was the kind of decision that gets nodded through in leadership meetings.
"Cheap leads. Fast scale. Easy volume. Let's do it."
And it nearly destroyed their business.
What Traditional Co-Reg Actually Is
Let's be clear about what you're buying with traditional co-reg:
User opts in on someone else's landing page.
Somewhere in the fine print it says: "You also agree to receive emails from..."
You get the lead. You pay for the lead. You hope they engage.
But here's the problem:
You don't know if that was their primary email
You don't know if they even remember signing up
You don't know if they're engaged anywhere
You don't know how long they'll stay active
You definitely don't know how they'll behave at Gmail vs. Yahoo
You're buying volume. And hoping engagement follows.
Sometimes it does.
Often it doesn't.
The Publisher Who Learned This The Hard Way
That publisher who called me?
They'd acquired 100,000 subscribers at $0.50 each through co-reg partnerships.
On paper: Amazing. $50K for 100K subscribers? That's a steal.
In reality:
18% activation rate (only 18K ever opened an email)
6% engagement rate after 60 days (only 6K were still clicking)
Gmail performance dropped 40% (inbox placement tanked)
Yahoo complaint rate spiked to 0.28% (throttling kicked in)
Revenue stayed completely flat
They didn't buy 100,000 subscribers.
They bought 6,000 engaged subscribers and 94,000 dead emails that destroyed their sender reputation.
Their actual cost per engaged subscriber? $8.33.
Not $0.50. $8.33.
And that's before accounting for the deliverability damage that took three months to recover from.
The Metric Nobody Tracks: Cost Per Engaged Subscriber
Here's the metric that actually matters:
Cost per engaged subscriber.
Not cost per lead.
If co-reg costs you $0.50 but only 18% activate…
Your real cost per engaged subscriber is $2.78.
If they cost you $0.50 but only 6% are still engaged after 60 days…
Your real cost per engaged subscriber is $8.33.
Now let's say a different source costs you $0.75 per lead but 60% activate and stay engaged:
Your cost per engaged subscriber is $1.25.
Which one is actually cheaper?
The "expensive" source that delivers engaged subscribers.
Not the "cheap" source that inflates your list with dead weight.
The Deliverability Angle Nobody Talks About
Here's what happened to that publisher between months 3-6:
Traditional co-reg inflated their list fast.
But because those users didn't engage:
Open rates dropped from 48% to 31%
Domain reputation weakened (Gmail started throttling)
Spam complaints increased (Yahoo flagged them)
Their Base Sending Segment shrank (had to cut volume to protect inbox placement)
They thought they were scaling.
But their deliverable audience was actually shrinking.
By month 6, they were sending to 150,000 subscribers but only reaching 35,000 of them.
That's not growth. That's list inflation.
And list inflation destroys your business slowly enough that you don't notice until it's too late.
What We Built Instead: Smart Leads
After watching this pattern repeat across dozens of publishers, we built something different.
Smart Leads don't start with a form submission.
They start with proven click behavior.
Here's how it works:
Instead of buying "someone who checked a box on someone else's form," you're buying:
Subscribers who have demonstrated active engagement
Subscribers whose click behavior matches your content category
Subscribers who are statistically modeled to behave like your best readers
You're not buying a random signup.
You're buying a statistically modeled engaged subscriber.
The difference shows up immediately:
88% activation rate (vs. 18% for traditional co-reg)
55% engagement rate after 90 days (vs. 6%)
78% of engaged subscribers still active after 90 days
Positive impact on deliverability (engaged users = stronger sender reputation)
Same budget. Different business outcome.
The Real Numbers: Co-Reg vs. Smart Leads
Let's run the actual math using real data:
Traditional Co-Reg:
Cost per lead: $0.50
Activation rate: 18%
Engaged after 60 days: 6%
Cost per engaged subscriber: $8.33
Deliverability impact: Negative (unengaged users hurt sender reputation)
Smart Leads:
Cost per lead: $0.50
Activation rate: 88%
Engaged after 60 days: 43% (of total subs)
Cost per engaged subscriber: $1.16
Deliverability impact: Positive (engaged users strengthen sender reputation)
You're paying 7x less per engaged subscriber with Smart Leads.
And you're not destroying your deliverability in the process.
This Isn't Anti Co-Reg (It's Anti-Guessing)
Co-reg isn't "bad."
It's just blind without the right data.
If you're running co-reg today, the real question isn't: "Is it cheap?"
It's:
What's the activation rate by source?
How long do those leads stay active?
What's the churn curve at 30/60/90 days?
What's the domain-level performance (Gmail vs. Yahoo)?
What's the actual cost per engaged subscriber?
What revenue is generated by the source?
If you don't know those numbers, you're guessing.
And guessing is expensive.
That publisher who spent $50K? They were guessing for six months.
By the time they called me, they'd lost more than the $50K they spent on acquisition. They'd lost:
Three months of deliverability recovery time
40% of their Gmail inbox placement
Trust with their existing engaged audience (who weren't receiving emails anymore)
Six months of revenue opportunity
The cheap leads turned out to be the most expensive decision they made all year.
The Bottom Line
Traditional co-reg buys signups.
Smart Leads buy modeled engagement.
One scales volume.
The other scales monetizable subscribers.
That difference matters more than most people realize.
Before you buy another batch of "cheap leads," ask yourself:
"Am I buying subscribers who will engage, or am I buying a deliverability problem?"
Because six months from now, you'll know the answer.
And by then, it might be too late to fix it.
Want to know if your current acquisition sources are actually profitable?
Book a call and we'll look at your cost per lead, activation rates by source, engagement over time, and deliverability impact, and show you the real cost per engaged subscriber across every channel.
(If you're running co-reg, affiliate traffic, or any third-party acquisition and don't know your true cost per engaged subscriber, you need this call.)
The cheapest lead isn't always the most profitable subscriber.
Build your list with people who actually want to hear from you, everything else is just expensive noise.
To growing your list the SMART way,
Chris Miquel
P.S. That publisher who spent $50K on co-reg? After we switched them to Smart Leads and cleaned up their deliverability, they're now acquiring subscribers at $0.50 with 88% activation. Same budget. 7x better cost per engaged subscriber. Different business model.
