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A Pretty Penny: Business Profile of Kyle Taylor and Penny Hoarder

(Bob Croslin)

Seven years ago, Kyle Taylor had five digits’ worth of debt.

Since then, he has converted a personal blog about scrimping into a company approaching $40 million in annual revenue

If Kyle Taylor’s site, The Penny Hoarder, covered his own story, the headline — Penny Hoarder headlines tend to the perky — would be something like: How One Millennial Turned Crushing Debt into Millions.

Then it would link you to advertisers to make him even more.

His site delivers “snackables” — content that readers consume in a quick bite — with one overriding theme: “To put more money in readers’ pockets.”

However much money his readers end up with in their pockets, they’re numerous enough to attract advertisers who’ve put plenty in Taylor’s. He does it with a grab bag of coverage: “List-icles” (“15 Cities Where You Can Make at Least $1,000/Month With Your Spare Room”) and eclectic selections like the working life of a Weeki Wachee mermaid. No point is too obvious to ignore: One “surprising tip” as a way to save at Bed, Bath & Beyond? Bring a coupon.

“Our vision is we can take some of the stress out of people’s lives when it comes to money. We try to use a little bit of humor, a little bit of corniness” to present what otherwise might be a boring topic, he says.

A quintessential Millennial, Taylor grew up in a quintessential suburban development, Lakewood Ranch in Manatee County. His mother works in a hospital lab. His father, who worked in credit-card processing, now has a tennis businesses around Denver. They are divorced. Taylor liked playing Monopoly with his two sisters so well that he went on to compete in tournaments. “That’s how nerdy I am,” he says.

He was raised to know the value of more than Monopoly money. The family charted household electric meter readings and made sure to turn off unneeded lights. As a single mom, his mother secured a gig as a mystery shopper, which meant free family meals undercover at the Waffle House and Chili’s in return for reports to management on the service.

“I grew up with all the privilege in the world and parents who taught me a ton about personal finance,” Taylor says. But “you turn 18, you get the first credit card.”

At the University of South Florida for a single semester, he majored in political science as he pursued his “West Wing” fantasy of being the next-gen Josh Lyman and working at the White House. He found employment getting out the vote for John Kerry, then for a park bond campaign in Austin, Texas. He moved on to other campaigns in other places with a sojourn at the University of Colorado at Denver and return stints to Florida thrown in.

By 2010, he had lots of political experience, no degree, just over $30,000 in student loans and just under $20,000 in credit-card debt, a total seemingly “insurmountable,” he says.

He chipped away at it, earning a few extra bucks here, saving $10 on car insurance there. And, living in St. Petersburg in 2010, he took to blogspot to chronicle his efforts under the pen name “The Penny Hoarder.” He says he started the online diary only as a way to keep himself honest. He worked side gigs — now a staple of The Penny Hoarder’s advice — that included putting his boyish face and mystery-shopper experience to use working for retail chains to see if he would be carded when buying booze.

Along the way, he discovered Google Ad Sense pays to put its ads in front of the readers that his blog drew. He says he made roughly 14 cents his first week. Then, in a field crowded with print publishers, from Money magazine to the local newspaper, all offering online personal finance, Taylor’s audience began attracting advertisers who offered him $75 or $100 to blog about their products. In his second year, blog income covered his rent.

Taylor continued his chronicles during a stay in Maine, and it was there in 2013 and 2014 that it became a full-time job. But he couldn’t envision the state as the place to build a business. “Coming home just made sense,” he says. In 2014, he returned. The following February, he hired his first employee.

Pennies piled up. By 2016, The Penny Hoarder had $20.5 million in revenue. The 9,396% increase over three years placed Taylor’s company 25th on Inc.’s list of the nation’s fastest-growing companies. The Penny Hoarder was the No. 1 media company on the list nationally and the third-fastest grower overall in Florida, behind health care company Adva-Net, based in Taylor’s old hometown of Lakewood Ranch, and Pompano Beachbased Solera Specialty Pharmacy.

Taylor discloses neither his margins — they typically are fat for online publishers like him — nor his profit, but he says the company has been profitable since inception and grew without investors. At a November ribbon-cutting when The Penny Hoarder moved into its new headquarters in downtown St. Petersburg, Taylor announced he would add 165 jobs in the next few years to his existing 80. For jobs his company creates and maintains for several years that pay an average of $66,098 (that target is 150% of the state’s 2017 average wage), it will receive a $6,000 tax credit per job. The maximum his company can receive for the 165 jobs created is $990,000 over the life of the incentive deal.

The new hires — video editors, writers, analysts — will find an office decorated with art that makes creative use of Lincoln’s image, pennies and currency. They’ll also find all the trappings of a Millennial-inspired workplace with a monetary twist — open spaces and collaboration rooms named for the faces on U.S. currency, plus one anticipating Harriet Tubman’s face on the $20 bill.

There’s a darkened area set aside for those needing quiet that’s also used for twice-daily meditation sessions. Those sessions originated with the “employee experience team” (HR) looking into mindfulness in the workplace. “I was pretty skeptical,” Taylor says of the meditation, but “after a few weeks I found myself sleeping through the night, feeling less stressed during the day.”

The eating area is complete with a corn hole game and a shelf loaded with board games. During a lunchtime visit, people are eating; no one is playing. His own office, one of the few private offices, features a reproduction antique desk, a piggy bank (empty), a USF sign, Mario in a Kart and books on business and management for a former poli-sci major climbing the entrepreneurial learning curve. “Every day you’re doing something you’ve never done before,” he says.

Drawing eyeballs

According to Alexa analytics in January, The Penny Hoarder ranked 400th globally among sites, up 800 spots in just a few months, and 137th in the nation. It draws above-average numbers of women, lower than average numbers of men and above average numbers of college grads. Many people come to the site via search engines answering queries on earning money online from home.

The Penny Hoarder’s main page touts 8.3 million “active penny hoarders” by totaling its Facebook, Pinterest and e-newsletter subscribers. The site itself draws from 12 million to 17 million unique visitors a month, Taylor says.

Visitors to the site encounter no banner ads — Taylor says that’s a yesteryear approach — no pop-up ads or video pre-roll ads to clutter the presentation. Advertising is more subtle. His revenue model depends on performance marketing — advertisers pay him for people who click on links in his articles and visit their sites. Embedded in the text of a sentence on earning money in side gigs, for example, might be a link to Uber, which pays him when people link through The Penny Hoarder to sign on as drivers.

The site generically reveals that an article is sponsored by an advertiser with a posting at the top of articles with a small portrait of Lincoln and a disclosure: “Some of the links in this post are from our sponsors. We’re letting you know because it’s what Honest Abe would do. After all, he is on our favorite coin.” All the links in the article on 15 cities where renting out a spare room can earn $1,000 a month, for example, are to Airbnb.

How much advertisers pay he won’t say. Rates vary depending on the advertiser’s objective, and the company tests different content with small sample sizes and then presents a long-term ad rate afterward. Such deals are “lucrative,” he acknowledged. “There’s no risk for the advertiser. If we’re not successful, they don’t pay anything,” he says.

The Penny Hoarder’s articles also include “branded content” in which advertisers pay upfront to be featured.

Is it journalism?

The Penny Hoarder’s business model raises the question of whether it’s doing journalism or something different — and ultimately, what happens to traditional journalism if more content providers and readers adopt Taylor’s model.

The site overall has an “infomercial feel,” observes Jeffrey Neely, an assistant professor of journalism at the University of Tampa. He says he would expect it to aspire to the “ethics of advertising, marketing or similar fields of strategic communication” rather than journalism.

Deni Elliott, department chair, professor and Eleanor Poynter Jamison Chair in Media Ethics and Press Policy at the University of South Florida St. Petersburg’s journalism and digital communications department, says The Penny Hoarder underscores how readers have a greater responsibility nowadays to sift what’s true and what isn’t and what motivates content.

“It’s hard to know what it is,” Elliott says. “Is it meant to be a news site? Is it meant to be an advertising site? My problem is I can’t tell what’s news from what’s opinion and what’s advertising. I find myself thinking, are the conventions changing? I hope it’s not a new convention. I hope it’s not a trend,” Elliott says. “I’m not convinced their focus is on saving people money. Primarily they exist to sell eyeballs to advertis- NEW MEDIA ers. I believe they are putting money into people’s pockets, but I think it’s the advertisers’ pockets.”

Taylor says that while he took money “without thinking” back in his early blog days, The Penny Hoarder’s writers and editors now vote on whether to accept an advertiser’s sponsorship, and staffers test products for compatibility with the company’s mission to save people money. “We’ve turned down more than half the advertisers that come our way,” Taylor says. He says the site has covered negative news about advertisers and follows “all principles of journalism.” That said, “We’re not quite a news outlet,” Taylor says. “What we’re aiming for is to be somewhere in the middle.”

Meanwhile, St. Petersburg leaders bask in the glow from a top 25 Inc. 500 in the city’s midst. “It really is the perfect example of the type of company we’re trying to attract to downtown,” says Mike Meidel, director of Pinellas County Economic Development. Taylor makes himself available to praise the city’s virtues. In December, for instance, Taylor met with a cohort of visiting corporate site selectors.

Ahead, Taylor hunts growth. The Penny Hoarder’s eighth-floor office has video recording and editing spaces, part of a big push into YouTube, where the company, as of early January, had a scant 1,465 channel subscribers. He’s hiring more content creators for original journalism. He wants to be on more platforms, get a “tip of the day” onto people’s phones and diversify the main site’s sources of traffic beyond the Google and Facebook spigots.

He ended 2017 at $37 million in revenue, going on double the prior year’s $20.5 million. “An insane number for me to think about,” Taylor says. “It was only a few years ago that that $50,000 got paid off.”

Also in this article: Jeffrey Neely; Deni Elliott

 

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