Expect Substack to Launch Ads

An ad product would mean Substack is converging on the same monetization playbook as the newsletter tools it set out to differentiate from. The reason is simple, once writers get big enough, subscription income alone leaves money on the table, and the platforms that help them sell sponsorships become more valuable. That matters most for Substack because its 10% take rate is harder to defend when Beehiiv and Kit offer SaaS pricing plus ad tools.

• By July 2025, Substack was already working on its own ad product, with many mid sized writers getting 20% to 60% of income from selling newsletter ad spots themselves. That is less a side experiment than a retention move to keep top publishers from leaving for Beehiiv and Kit.
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• Beehiiv showed the model first. By April 2024, about 30% of its revenue came from ads through Ad Network, and by June 2025 about a third of revenue came from its performance ad network and creator to creator marketplace. That gave writers a built in way to monetize free readers, not just paid subscribers.
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• The business model contrast explains the pressure. Substack made about $45M annualized revenue on a 10% cut of roughly $450M GMV in mid 2025, while Kit reached about $43M ARR in 2024 through SaaS fees. When rivals monetize software and sponsorship demand directly, Substack needs more monetization surface area to justify its cut.
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The market is moving toward hybrid newsletter platforms where creators use one product for paid subscriptions, free audience growth, and advertiser matching. That favors companies that can turn reader attention into multiple revenue streams. Substack is likely to keep moving in that direction, and the real contest will be over which platform gives top writers the highest earnings per subscriber.