July 28, 2009   

Recruitment Advertising Model Turned Upside Down by Game Changing P4P Model

Every once in a while along comes a product or service that changes the whole way an industry works.

Consider for a moment the impact of the jet plane on the transatlantic liner business, or TVs on Cinema chains.

One minute you have leading edge technology, next your product is obsolete! Just ask Kodak about the impact of digital cameras!

One of the most profitable businesses in the 20th century was the newspapers and their "rivers of gold": the revenues from classified adverts.

Mass markets were serviced by mass production and these mass markets demanded mass marketing. At the time nothing was better than newspapers and the grip they had over their readers.

That is until the World Wide Web came along and as internet use grew, more and more advertising dollars were transferred from print onto the net.

According to internetworldstats.com:

"Canada ranks as the 12th country in the world for Internet usage with 28.0 million users, over 80% of the total population. Over 50% of Canadians connect to the Internet using a type of high-speed connection, compared to just a third in the US. In addition, habits of online Canadians differ greatly from Americans. In particular, 48% of Internet users connect at least three times per day."

So it's no wonder if you are looking to rent a house, buy a car or find a job - the internet is where you look.

Talking specifically about job advertising, Chris Klotz, founder of the first internet job board in Canada said, "In the first instance job boards were places to find job advertisements that looked just like they did when in print. The extra convenience of the internet is that you can apply immediately when you find the job using an online job search engine".

"Both professional recruiters and job seekers quickly saw this was the new paradigm, and although corporate recruiters have been slower to adopt, job boards are the new business model for recruiting" Chris added.

Newspaper's traditional classified revenues continue to fall as job board revenues rise and this is due to recruiters substituting print with the internet. Although newspapers were slow to recognize this shift, most now offer web based versions of their classifieds.

But the pricing model for online classified advertisements has remained the same as the antiquated print model.

This is where JobServe, the world's first job board, saw flaws in the pricing model with the transition of the industry from print to online.

The internet measures everything - who clicks where and when. So job boards know how many candidates view each advert and how many applications each job received. But job boards still charge the same for an advertisement whether it gets 20 applications or none.

The shift in pricing model will drive down revenues of job boards that fail to perform, and could result in a further shakeout in the industry.

In addition, corporate recruiters will be attracted to the model, particularly to job boards which provide additional features like the ability to filter out the best candidates.

With more technology being applied to online recruiting, today's leading brands are facing a stiff challenge from the smaller, technically-driven job boards.

Klotz says, "The old 'pay and pray' pricing model was a legacy from the print days, and JobServe have challenged it with a revolutionary 'P4P' model (pay for performance)".

"The future for the recruiting industry is not only online, but in only paying for what is delivered. Recruitment agencies only get paid when they make a placement, so we job boards should only get paid when we deliver applications", he added.

About JobServe

JobServe Canada was formed in January 2007 as the result of the acquisition of JobShark.com, Canada's largest independent job board.

With its Canadian headquarters in Ottawa, Canada, and its global headquarters in Essex, UK, JobServe also has offices in America, Australia, and Thailand.

JobServe was the world's first Internet Recruitment Service, formed in late 1993 by Robbie Cowling. In 2006 JobServe launched JobServe Mobile, with a simplified job search and apply function suitable for mobile phone browsers.

JobServe is part of the Aspire Media Group.

For more information please visit www.jobserve.ca or www.aspiremediagroup.net