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