Call it whatever you like – pay-per-action, pay-per-acquisition, pay-per-applicant or just plain old “PPA” – Indeed.com announced today at Kennedy that it is currently beta testing a PPA solution with select clients where advertisers only pay for job applicants, as opposed to just visitors. Consider it an evolution from the pay-per-click (PPC) model currently in fashion.
I spoke with Indeed’s Paul Forster about this and some other items today and will post the podcast as soon as possible. Nevertheless, this is a very interesting development in the online recruitment space that helps push the envelope further away from the flat-fee model that has thrived since the dawn of the job board. Stay tuned.
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May 11th, 2007 at 6:05 am
Joel, if the “action” item can be clearly defined and properly tracked then PPA is cetainly one way to go..
At Recruit.net we’ve been doing PPA for resume submittals in the Australia market for a couple of months.
http://australia.recruit.net/search-engineering-jobs
Remember we spoke to you about PPA and CPA (cost-per-action) back in September last year (http://www.cheezhead.com/2006/09/21/recruit-net-interview/)
Good to see you guys in the US finally catching up ;)
May 11th, 2007 at 7:04 am
It’s a step in the right direction, but I still think the fact that the majority of candidates who apply for a job are un/under qualified will be a problem (not so much for the job board clients of indeed, but for the corporate clients). People will not like the fact they are paying $5.00 (or whatever the cost is) for 95% unqualified candidates. The flat-fee model, while antiquated, doesn’t bring this fact to light because companies are paying for the posting/advertising, not the results.
May 11th, 2007 at 1:22 pm
@Rob
Good. Maybe employers will rethink “recruiting success metrics” based on number of resumes collected and actually focus on what matters, finding the highest quality candidates with the best competencies.
This would require actually reading resumes to look at skills, quality of education and evaluate candidates based on “what is possible” rather than a compliance mindset.
The good news is that will lead to innovative, productive teams which don’t carry limiting beliefs.
May 11th, 2007 at 1:42 pm
I applaud Paul and his team for trying to move the needle forward. However, in an age where large companies want fewer but more qualified candidates, I still don’t think this will be an appealing option for name-brand companies like Nike or Google.
They could do very well, however, with small and mid-sized companies and lesser known large companies. Small and mid-sized companies are in the majority (only ~16,000 companies have more than 500 employees, whereas there are over 5 million that have under 500). Of course the challenge there is identifying and selling into these companies without “creating a Monster” that your revenue base can’t support.
Interested to see how this is received in the market!
May 11th, 2007 at 4:11 pm
I find it difficult to believe that job boards and recruitment agencies that provide the majority of the content on Indeed are going to stand for direct competition. This would seem to be the suicide business plan unless they believe they can gain critical mass rapidly enough to offset the loss in job content access.
May 11th, 2007 at 5:59 pm
It is simply a metrics game, they understand their click through rate and the apply rate. Ultimately, they are able to work with more organizations since the bulk of the monetary risk lies on the indeed side. There has been a major shift towards CPA in most other areas online, it would make sense that it eventaully moves into the recruiting space.
Cheers,
Mike
May 12th, 2007 at 3:43 pm
I wonder what defines the A (Action) in PPA? Is the action simply clicking on an apply button or is it actually going thru the entire application process and submitting a resume. There’s a huge difference in the two actions. I know companies would like it to be the latter, but that’s really not fair to indeed as some corporations have a horrendous application process that makes you go thru 17 steps and have a 90% drop out rate in the application process. Unless there’s a standardized application process (ie: click here to e-mail your resume), I see this as a potential problem for the PPA model.
I agree with Dave that PPC and PPA are great options for companies that aren’t bombarded on a daily basis with thousands of resumes like Nike and Google, etc….but reaching these guys takes a “monsterous” sales effort which costs mucho dinero. PPC or PPA job boards will NEVER be a self-service business like Google was and for the most part still is.
May 12th, 2007 at 11:53 pm
Congrats Paul and Rony!
Once again, they are moving the cheese.
The biggest question is how long the technology adoption will take.
In the past, the majority of employers have been less then willing to adopt SEO, PPC, or SEM.
While I applaud the service release, I think its just another tool with a long-term adoption cycle, and no overwhelming demand.
There are a few early adopters out there that get it.. and they will reap great rewards.
The Tornado can’t occur until employers learn to adopt and realistically track “Source of Hire”, and have this measure in their daily dashboard.
Without reliable tracking data, all innovative marketing initiatives are off the table for Director of Recruiting, who can’t prove the ROI.
Over time, employers will get it. The question how long will it take?
Mark & Gerry have been talking about it for 4 years now… and still not much results.
Peter Weddle, Doug Geinzer, and a couple of us at the International Association of Employment Websites (IAEWS), are working on some standards that we think could help all players, ATS companies, job boards, Employers, SEO, PPC, and SEM services.
The sooner an employer learns the value of Source of Hire Tracking, the sooner they will learn the real value in many of these new marketing services.
Those that figure it out first, and have real-time tracking, will be using CPA, PPC, SEM, and SEO to create a significant hiring advantage, no matter if we are in a “War for Talent” or not.
Cheers,
Jonathan