Notes on the Programmatic Job Ad Industry

27 Jul 2024

Through my experience developing Hire Rewards, a cash back job searching platform, I learned a lot about how the job advertising industry works. This sector is unique, with a landscape where competitors are often also customers of each other. For example, major job boards like Indeed, LinkedIn, and ZipRecruiter are both competitors and customers of each other.

Additionally, there are job aggregators and agencies, some with user-facing job search websites and others without. These entities have publisher programs allowing job boards to ingest job listings and get paid for driving traffic to the agency or publisher’s jobs. User-facing job search sites act as publishers in this ecosystem.

Here are some detailed observations and insights into the industry:

Common Pricing Models

• CPC (Cost-Per-Click): This is the most prevalent pricing model for transactions between publishers and job boards or aggregators. CPC rates typically range from 15-25 cents per click. With an average click-to-apply rate of 5-10%, most publishers earn about $5 per job submission they generate. However, even if a publisher drives higher conversion rates, CPC rates remain relatively static.
• CPA (Cost-Per-Apply): Supported by a smaller fraction of job aggregators and agencies, CPA requires deep integration with the employer’s job application page to track the job apply, making it less common.

Quality Measurement Challenges

Measuring the quality of job applicants by job aggregators and agencies is mostly non-scientific and reactive. The primary method involves conversations with employers about the quality of candidates from specific websites. This approach is anecdotal, lacking the ability to automatically track job funnel stats through ATS integrations. Consequently, many large employers spend substantial sums without the aggregators or agencies being able to optimize for the best candidate sources super effectively. Online advertising on social media/search engines are very effective at optimizing for conversions, but most job ads aren’t built to track hiring outcomes.

Industry Decline

The job advertising sector is experiencing a downturn. Indeed and ZipRecruiter, the two largest job boards, have reported double-digit year-over-year revenue declines since the labor market stabilized post-COVID. Monster and CareerBuilder have merged to try to compete with larger players, while Appcast and Bayard have merged in the aggregator/agency space. No significant new player has emerged in the last decade to disrupt the market.

Unique Industry Dynamics

The large players in the job advertising industry enjoy a comfortable market position with little risk of being unseated. However, they are also experiencing structural decline. Industry leaders are focused on minimizing further business erosion, leading to a general lack of innovation.