Why Budget Distribution means more than Cost Per Application in Job Advertising:

Job advertising is very often not very well aligned with business goals. This post focuses on one thing you can do to improve that; shifting your focus from your cost per application to the distribution of your advertising budget.

Why focusing on cost per application is wrong:

As long as the cost per application is low and keeps decreasing, a lot of people think they are doing something right. Well, they usually aren’t. Why not? Because usually focusing on a lower cost per application means that budget is not spent where it is needed and effective. You can for example easily lower your cost per application by spending most of your money on the jobs that are easy to fill. Does that help a business? Not really!

There is the big difference in advertising strategy when you look at recruitment versus e-commerce; we don’t want to sell as much as possible; we want the right number of buyers (candidates) for every product (job) we have.

This is also the reason why so many people responsible for/selling job advertising are not really helping their customer/employer; they are focusing on the huge numbers they have delivered for low prices, but this is not what businesses need. It’s what they think they want or need maybe, but it simply isn’t. We need to focus way more on where money is spent. There is much more to win if you do that compared to just focusing on lowering your cost per application.

The ideal situation: Focus on distribution of budget.

What should the goal of an employer, staffing agency or job board ideally be when spending money on attracting candidates to jobs?

Employer: I want to thrive as a business by getting as many of my jobs filled as possible within my budget.
Staffing agency: I want thrive as a business by filling as many of my customers’ jobs as possible within my budget.
Job board: I want to thrive as a business by getting as many customers as possible the right number of candidates per job they post as possible within my budget.
And thus we need to focus on only spending our money there where we know a job will not get enough candidates if we don’t advertise with it, but also on not spending money on jobs we know we can’t get any candidates for.

How to get there:

First we need to sit down with whoever knows the answer to this question: How many candidates/interviews per job does it take to make the customer happy? If you know this answer, you know the goal and you know that if you reach this goal, you will keep your job/customer.

Second of all you need to realize that if you spend any money on jobs that are going to reach their goal anyway, you are getting your customer/employer further away from their goal instead of closer. Because; you are spending their budget, but not helping them because they don’t need more candidates for jobs they already have enough candidates for.

Then you need to realize that if you spend money on jobs that are not going to reach their goal, but people are (almost) not going to apply for wherever you advertise with them, you are not helping your customer either. You keep burning money on jobs your customers want more candidates for, but are (almost) not getting them any; not good.

Last but not least, the main point of this post; you need to realize that you should spend as much money as possible (within budget of course) on those jobs your employer/customer needs more candidates for AND advertising works for. That’s the sweet spot where you are actually helping a business achieve their goal.

How software can help you make this change:

Usually when I speak with people, they agree with the above, except of course when they are solely focused on user/candidate acquisition in terms of numbers. However, not many of these people are able to dedicate so much time to managing their job advertising campaigns in multiple sources, to actually execute this strategy.

That’s why a few companies (like OnRecruit, the business I work for) have built software that automates executing this strategy. You simply tell it how much budget you have and what your goal is and it constantly turns your jobs on and off based on the data it’s getting about your jobs from your website. Of course it also focuses on getting you a low cost per application, but not just the lowest possible on any jobs you have. If companies now spend half their budget on jobs that would reach their goal anyways (usually it’s more than half) and technology can spend that part of budget on jobs that actually need more inflow of candidates to reach their goal, you can imagine the huge impact technology can make.

Conclusion:

Whoever you are, if you are advertising with jobs please start talking internally and with your suppliers about at what jobs your money should get allocated. You will be amazed by the results if you start investing less/nothing on jobs that don’t need more inflow of candidates/advertising doesn’t work for and more on those jobs that do need it and it works for.

Let me know if you need any additional advice; I’m always happy to help. You can reach me via rene@onrecruit.nl and of course find me on LinkedIn, Facebook and Twitter.

Why Job Boards are adopting Programmatic Job Advertising:

More than 75% of advertising budgets in the US is spent programmatically. This is because using technology to manage advertising cuts costs and enables advertisers to get much better results. Recently job boards have started adopting programmatic job advertising and this is why:

  1. More revenue

A lot of job boards sell part of their inventory via backfill (selling to other job boards) or Google AdSense. Selling this inventory via programmatic job advertising (technology) vendors can help them get money from employers and staffing agencies that are willing to pay a premium price for performance. This increases the price per click/applications job boards can get for the inventory they don’t sell directly.

  1. Again: More revenue

Another way job boards can generate more revenue by using programmatic job advertising is by starting to target candidates outside job search related websites and adding this service as a premium to their offerings. There are already quite some examples in the market of companies doing this.

  1. Effective media buying

Many job boards (in fragmented markets) depend on job aggregators more then they would like to admit. They would love to go back in time, but simply can’t. Job aggregators being extremely dominant in online job search simply means they have to work with them. Spending money in job aggregators is easy, but if they want to do it effectively and efficiently it’s almost impossible to let humans manage this. That’s why job boards work with companies that offer programmatic job advertising technology.

  1. Critical customers

Another issue job boards have is that their customers are becoming far more critical. In the ‘good old days’ you could just sell job postings and clients would keep buying them based on gut feeling. That era is over in many countries and will be over in most countries soon. Customers are now looking into performance of job boards and this means many of them see their providers fail to provide them with enough (quality) candidates for some or all of their jobs. To make sure their advertising budget is being spent on those jobs that need it most (and not on those jobs that already perform well), job boards use programmatic ad buying technology that pinpoints those jobs and buys traffic for those jobs automatically by using historic and real-time data.

  1. Multi channel approach

Since the largest job aggregator is not selling job boards traffic anymore, job boards have to go to other job aggregators who are much less dominant. Having to work with multiple job aggregators effectively is very hard, as you have to manage your budgets across different sources constantly. Again; programmatic job advertising technology is the solution.

The difference between Programmatic Job Advertising and Programmatic Advertising

Lately I’ve seen a lot of discussion going on about Programmatic Job Advertising. Some claim that Programmatic Job Advertising is the same as Programmatic Advertising; some claim it’s totally different and thus shouldn’t be called programmatic.

What is Programmatic Advertising?

Programmatic Advertising means that software analyses the result of advertising and then tries to repeat successful practices. For example if it sees that when you visit Booking.com on your mobile, look at a hotel, but don’t book the hotel and then when you’re shown an ad on Facebook via desktop at night that tries to get you back to this page about the hotel, you actually book the hotel, it will try to do the same thing again. Not just when you visit a hotel page on your mobile again and don’t book, but also when others (similar to you) do this. Can you imagine a marketer sitting behind his computer at night waiting for you to go to Facebook and then hitting a button to show you an ad? Not really, right? That’s why we use software to figure out what works, but also then to execute those things that work over and over again.

The difference:

Programmatic Job Advertising is currently mainly being used in websites that make most of their money by selling job ads. It started in job aggregators and will soon find it’s way to job boards and LinkedIn. And that’s why people are so confused; when we talk about Programmatic Advertising in e-commerce, we usually talk about buying ads in websites based on audience targeting such as display advertising (showing banners), but that’s not what companies who offer programmatic job advertising technology do (yet).

Why does this difference exist?

The first reason is that most companies (job boards, recruitment agencies and employers) who advertise with jobs in job aggregators, job boards and social networks are not very good at doing that. They don’t have data on what works and if they have it; how to use it to optimize their job advertising and how to buy media in a smarter way to get closer to their goal. So there’s a need to align media spend with goals and this is why a few companies have built Programmatic Job Advertising technology: To help advertisers: 1: Track results, 2: Optimize results, 3: Buy media for them based on data. So far this kind of technology has only been used by innovators in the ‘recruitment market’ and is still not widely adopted. That’s why vendors in this space are focusing on first getting adoption and then innovating further. There’s simply no point in creating something only a few innovators will use when there are thousands of buyers you can make money from if you just help them do what they already do a lot better.

The second reason is that doing the same thing in Programmatic Job Advertising as in Programmatic Advertising requires a lot. First of all, it requires deep understanding of audiences, profiling etc. You can’t just start showing banners to people, as this will cost advertisers not only money, but also their reputation. Most examples of companies who are using display advertising to attract people to their jobs are not that great. Just to give you an easy example: When I look at one of your jobs for 5 seconds an then you keep hunting me down on the internet with that specific job for a month, it doesn’t really help you. Obviously there’s no point for tech vendors in automating these kinds of practices. Targeting audiences is much more complex than most people think as you have to be able to take into account your own data (for example; website and ats/crm data), data from the publisher who can show your ad (device, time, context etc.) and data from third parties (who for example have databases with profiles) and then have to show a good ad. To apply this to job advertising, first we will need to build a smarter way to figure out what really works, which can not be just based on first or last click, but by being able to see what channels a candidate used, with what kind of devices, at what times and what pages they visited.

The third reason is that as mentioned above; when we want to use display, we will need better ads/job related content; we can’t just use some text from the job ad in your website and put it in a banner. This is a problem, as most companies who have tens, hundreds or thousands of different jobs, are not going to create awesome content for all those jobs. For the optimistic readers: Yes, this is a great business opportunity.

Will Programmatic Job Advertising get closer to Programmatic Advertising?

If you ask my team and me: Yes. And I’m sure more companies will head into this direction. The future of job advertising is pretty bright if we all (employers, staffing agencies, job boards, social networks, ats/crm providers, IT departments, programmatic job advertising vendors, publishers, third parties) play nicely. With playing nicely I mean: Connect (in terms of data and pricing models), help each other understand what our combined data actually means and then figure out ways to do something with those insights.

What is Programmatic Job Advertising?

Programmatic advertising has been around for a few years and is now also something that has entered recruiting. What is programmatic job advertising, why do companies use it and what does it mean for the future of recruitment?

Programmatic advertising

Let’s start by explaining programmatic advertising. Programmatic advertising basically means that you let software buy and control advertising instead of humans. The goal is to reduce the cost of media and the cost of buying and managing the media, but more importantly: Running more effective campaigns, so getting a higher return on investment.

Programmatic job advertising

Programmatic job advertising means that you give software job advertising budget and input goals you want to reach and then let the technology do what it does best; get you as close as possible to your goals within your budget. For example you could say that you want to have 20 applicants on every job in your website and want to pay a maximum of 10 USD per finished application. The technology then measures how much candidates you are getting ‘for free’ in your website and figures out how much more you will need, then figures out where and when to ‘buy’ these applicants and then does that for you.

Why companies use programmatic job advertising

The reason employers, recruitment agencies and job boards are using programmatic job advertising is that they rely more and more on job aggregators who don’t offer a model in which you can post a job for a fee, but a model in which you can pay per click via a bidding model. This is a great model, but quite hard to manage. For example: If you have 1.000 jobs on your website, then how do you constantly monitor which job should be turned on and turned off in your platform based on the number of candidates you have for that position? And how do you determine how much budget you should give each aggregator and what the ideal bid per click is for every keyword/job? The more jobs companies have on their website, the more they spend on job advertising, the more it makes sense to invest in programmatic job advertising technology for them so they can run effective campaigns without spending too much money and time on them.

What programmatic advertising means for the future of recruitment?

Programmatic job advertising means that we will need less people in recruitment (marketing) focussing on things that can be automated and more people who understand data and the real recruiting goals of their employer. This means the life of the recruiter will get easier and every company will have an expert working with them (internally or externally) who understands data and can translate budget and needs of the company into an effective strategy. It also means more and more media channels will start offering performance-based advertising. Last but not least it will also mean that the current technologies in programmatic job advertising will move from performance based advertising channels to technologies that can also automatically use credits companies have bought from non performance based recruitment advertising channels.