Job Ad Pricing Evolves

New model charges only if candidates apply

By Roy Maurer Apr 18, 2016
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chris.gifMeet Chris Forman, CEO and founder of StartDate Labs, the Lebanon, N.H.-based incubator that bore Appcast, a platform allowing recruiters to advertise open jobs on a pay-per-applicant basis across a network of thousands of careers sites. Forman spoke to SHRM Online about how the cost-per-applicant model differs from traditional pricing structures and how programmatic advertising is changing recruiting.

SHRM Online: What is cost-per-applicant pricing?

Forman: Cost-per-applicant [CPA] pricing lets employers pay for the result they really want: a completed job application.

Under the CPA model, an employer pays only when a job seeker applies to one of their jobs. For the publisher of the successful ad, such as a job board, payment is effectively a reward for a job well done. The key to making the model work is better analytics and rules-based buying.

CPA demands that both the publisher and the employer know when an [application] has occurred in real time. This is achieved by installing a small piece of code, known as a tracking beacon, on the application-received page of the employer’s recruitment portal. The beacon fires when someone lands on the page after completing a job application. It works with every major applicant tracking system.

SHRM Online: How does it differ from the cost-per-click or duration-based posting models?

Forman: The CPA pricing model comes from the growing acknowledgement that recruitment advertising can be done more efficiently, with direct and immediate benefits to recruitment ROI [return on investment]. CPA moves away from the “post and pray” limitations of duration-based postings and the conversion rate disconnect experienced under the cost-per-click model to drive the right number of candidates to the right positions at the right cost per applicant.

Duration-based posting comes with upfront pricing which provides no guarantee of finding qualified candidates, and cost-per-click could eat into the employer’s advertising budget as they pay for every ad that gets clicked on.

By charging only when a job seeker applies, CPA offers clear advantages over duration-based postings and cost-per-click, including a massive reduction of risk, a greater partnership between employers and publishers, and a better return on investment.

With no fee to list positions, employers can list all open jobs across a variety of locations for free. Job boards are highly motivated to drive the most value, in terms of applications, toward the employer so employers are likely to see a reduction in their time-to-hire. Used intelligently, CPA can also drastically reduce an employer’s overall cost-per-hire by removing the gamble from duration-based ads and eliminating the low mobile-conversion risk and application length drop-off associated with the cost-per-click pricing model.

SHRM Online: What is programmatic recruitment advertising and how does it fit in with CPA?

Forman: Programmatic recruitment advertising automates the buying and placement of job ads through networks of job-related websites on either a pay-per-click or CPA basis. Using a programmatic ad exchange, recruiters can turn the entire Internet into their “help wanted” sign.

Before programmatic, anyone who wished to place a job ad would have to research the best places to reach candidates, engage in an administrative-heavy process of querying slot pricing and availability from various publishers, place orders, and manually upload their job ads.

The rise of programmatic advertising in the job space means that recruitment advertisers no longer have to post their job ads and pray. Programmatic advertising seeks out viable candidates and targets them on various channels until the message elicits the desired response—a completed job application.

Since artificial intelligence makes better placement decisions than people, programmatic allows for accurate and successful audience targeting. In other words, you reduce the number of jobs that have too many or too few applies, and you spend less money to generate a quality apply.

Programmatic also surpasses any one job board. The algorithm automatically optimizes which publisher is used for the highest conversion rate for each job posting. And since automated processes decrease the labor-intensive resources usually associated with ad-buying operations, recruiters are freed up to focus on creative and value-added activities.

SHRM Online: What’s the next likely step forward for job ads?

Forman: As the value proposition becomes increasingly apparent for recruiters and talent acquisition professionals, programmatic recruitment advertising is the future and growth rates should accelerate dramatically in the next few years.

In the early 2000s, Google disrupted the consumer world forever with cost-per-click (CPC) advertising. Recruitment followed suit. Platforms like Indeed and SimplyHired launched their own CPC models that enabled recruiters to spread their budgets across sites where the candidates they needed were looking, spending money only when someone clicked to view a posting.

While CPC has certainly helped shape how advertisers focus their budgets, it must be managed manually and requires sophisticated planning to drive strong performance.

About five years ago, the programmatic advertising engine entered the scene. Instead of having the advertiser plan and build a strategy from the ground up, the sophistication is served to them on a silver platter. Advertisers pull in their end goals, set custom advertising rules and budgets, and hit “go.”

Now, this programmatic paradigm shift is set to take the recruitment industry by storm. We’ve seen it with job boards and we’ve seen it with CPC. With the rest of the digital world marching toward programmatic, there’s no way recruiting will stay stuck in the classifieds. If you can sell an Audi through programmatic ads, you can do the same with an inventory of jobs.

Roy Maurer is an online editor/manager for SHRM. Follow him @SHRMRoy

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