Seeking Alpha’s Rocco Pendola on the State of Financial Media
If you spotted Rocco Pendola sipping tea at Caffe Luxxe in Santa Monica, he probably wouldn’t fit the stereotype of someone seriously interested in the stock market. With a full beard, brown hair that touches his shoulders, and clothes that blend in better at an indie rock show than the country club, he’s not exactly the Wall Street type.
But as an editor of SeekingAlpha.com, one of the most popular financial websites, Pendola is faced with a dilemma: driving traffic for content — which generally appeals to an older demographic –- via social media.
“If you want to have social media traffic like Business Insider, Buzzfeed and Huffington Post have, then you need to do that kind of content — and that kind of content generally skews younger.”
Seeking Alpha publishes a variety of articles each day. While it recaps overall market trends like most sites, its emphasis is on opinion pieces explaining why investors should be bullish or bearish on particular companies. And the site is never lacking for material; Seeking Alpha publishes between 250 and 300 posts each day, according to Pendola.
Pendola is responsible for editing much of this content and finding intriguing voices he feels will match SA’s opinion-driven format. Still, the challenge remains driving traffic to the site through social media.
The issue isn’t unique to Seeking Alpha. The act of actively typing in a domain name is a waning habit, and it has placed an emphasis on building an audience through Twitter, Facebook, and other social media outlets.
Pendola believes sites like his have to draw the social media crowd with “intriguing” pieces, as a way of building their core audience. Once the crowd is in he door, it will be more willing to look at heavier, more straightforward pieces.
“That’s what sites like Buzzfeed do. They have some really good journalism that’s being done over there,” said Pendola. “But I certainly don’t think that’s what’s driving massive amounts of traffic.”
Expecting Seeking Alpha to compete on the same level as Buzzfeed would be unfair: SA draws about eight million unique visitors each month, while Buzzfeed brings in more than 200 million.
But financial news is a niche market, and Seeking Alpha is at the forefront. The site is ranked the 552nd most popular site in America, while its chief competitor TheStreet.com is 806, according to audience measurement firm Quantcast (The Street brings in between seven and eight million unique visitors each month).
Traffic equals money, and Seeking Alpha recognizes the changing zeitgeist in how users access their site. Last summer it abandoned paying Yahoo to display its links in their Finance section, after the cost increased more than 300 percent to 13 cents per click. This has made SA place even more emphasis on churning out content, in an effort to generate page views and drive traffic.
Still, Pendola believes the focus should be on creating the best content possible for its loyal followers, rather than simply catering to a younger demographic.
“I think [the financial media] is always going to be a niche, quite honestly…and there’s nothing wrong with being a niche,” said Pendola. “Try to capture as many of those hardcore people as you can, and then try and convert as many people who are more casual. It’s not easy.”
Like most free sites, Seeking Alpha monetizes through advertisements, which are mostly relegated to the sidebars of articles. Pendola noted advertisers are sold on the idea of “owning” an entire section of a site — where companies can choose to be seen under ETFs, IPOs, or other popular categories. Advertisers are able to choose specific brands or topics they feel they will resonate most with their target audience.
And what makes monetizing financial sites distinct is the value the audience holds with advertisers.
“They’re buying a Mercedes and have an account with Fidelity,” explained Pendola. “So to have that one 30-year-old who is big-time into the stock-market is more valuable than the four to five you have to twist their arms to get into it.”
As an additional revenue stream, Seeking Alpha has been expanding its PRO service, a paid subscription option that offers “exclusive first look to our best long and short ideas,” as the company puts it. SA is selling research, and it doesn’t come cheap. PRO is aimed at high-end investors and firms, and costs subscribers $2,400 per quarter.
But services like this — along with a steady stream of free content — has made Seeking Alpha an enormous success. And It’s part of the reason it was worthwhile for Pendola to transition from a top competitor last year.
Founded in 2004 by Oxford grad David Jackson, the site has more than eight million unique visitors each month. The site differentiated itself from established financial outlets as a platform for “crowdsourced equity research,” boasting nearly 10,000 different contributors in its history. The rotating cast of writers allows SA to keep costs down compared to sites with salaried reporters.
“We decide who can post on Seeking Alpha based on an evaluation of the quality of their submissions,” Jackson recently told True, an online magazine. “If we think you’ve got something valuable to say about a stock, we’ll publish your article.”
That’s where Pendola comes in. As an editor, Pendola enjoys the process of finding and helping to mold the contributors on Seeking Alpha. Writers are paid a $35 flat fee, plus one cent for each page view, and PRO contributors earn between $150–500 for their content.
Accentuating the writer’s voice is something Pendola feels is especially key to the site’s growth moving forward, and that it is something financial outlets haven’t exploited enough. In comparison to sports and political media, online stock market analysis is devoid of singular writers whom audiences have latched onto.
“Personality, opinion, and analysis works, and that is what we’re going for at Seeking Alpha,” said Pendola. “We don’t want people as contributors to be reporters, because you can get that reporting from so many other sources.”
Personality is something that Pendola would know about.
He spent more than a decade in sports talk radio, which took him from his native upstate New York to Miami and to Dallas. On his twitter feed, you’re just as likely to see a comment on Amazon’s share price as you are a hockey game, a remark on a musician, or a picture of the Santa Monica coast.
If you want an opinion, he won’t mince words.
Should Seeking Alpha follow other financial sites and start integrating more video content to drive ad revenue?
“Everyone is going toward video because it’s more lucrative. But if the user experience sucks, why do it?” said Pendola. “Don’t do video for the sake of doing video.”
While Pendola believes having strong opinions and showing some personality has served him well in expanding his following, it also played a part in his transition away from his last job at The Street.
Pendola was a jack-of-all-trades at The Street — a stock market analysis site founded by Jim Cramer in 1996 — contributing as a writer, video commentator on financial news channel CNBC, and director of social media. Yet, when a new Editor in Chief was appointed in 2013, he started to receive much more “pushback” on letting his voice shine through. The editorial staff wanted him to be more of a classic reporter.
To Pendola, it didn’t make much sense — from both a content and financial aspect — to go toe-to-toe against giants like CNBC, Bloomberg, and the Wall Street Journal on sheer reporting.
After joining Seeking Alpha last year, he found that he not only wanted to be more of a behind-the-scenes contributor, but that his new company shared his vision for success. To continue growing the business, his game plan is to put even more of an emphasis on informed, opinionated content.
“When you’re smaller –when you’re The Street and Seeking Alpha — I think you win by telling investors this is where you come to make sense of all that news,” said Pendola. “Here is what happened, but what does it mean, what is your opinion on it, is it compelling and does it challenge my own viewpoint?”
