Dave talks to Simon Wingate about Reed’s rollout of performance-based advertising, the challenges in the performance-based model for recruiters right now, why performance is the long-term future of recruitment media models and how data is the key to the success of it.
The One Where They Talk About…
- Why Reed has introduced performance advertising
- Recruitment agencies currently unlikely to adopt performance models at scale
- Enterprise level direct employers the first to adopt performance
- The challenge for a recruiter uptake of performance
- The long-term future of media models is likely performance-led
- Packages will change with greater data
- Data will help to deliver quality applications
- Performance models could offer a better candidate experience
In Episode 217 of the Talent Matters podcast series, Wave CEO Dave Jenkins is joined by the Managing Director of Reed.co.uk , Simon Wingate. Having spent his entire career to date in recruitment media, with the past 12.5 years at Reed.co.uk , Simon is well versed in how job boards operate, how they’ve evolved, and the direction they’re travelling in.
It’s a chat that primarily explores the new(ish) kid on the block, performance job advertising, how it works, who might benefit from it, and what the future is for advertising payment models on job boards. It’s well worth half an hour of your time so do give it a listen but in the meantime we’ve compiled the key takeaways for you below.
Why Reed has introduced performance advertising
Having previously focused on duration-based models, Reed has recently rolled out a model based on performance. The job board began to have robust conversations around it 4 years ago and in the past 12 months have focused much more of delivering a performance-based proposition. Simon recognises that the majority won’t move over (yet) but this is in response to a segment of the market that have been asking for Reed.co.uk to invest in this for some time. The last 12 months have been spent educating customers about what the proposition is and proactively developing a service from which customers can self-serve.
Recruitment agencies currently unlikely to adopt performance models at scale
Recruitment businesses have been slow to adopt this model, largely because, in its current form, it doesn’t make business sense for them. Some are opting for their main contract to be duration-based but to use performance-based for a particular campaign or a client who requests it. Simon himself admits that he “would question whether performance-based job advertising will ever be the pre-eminent model for recruitment agencies, certainly in the foreseeable future.”
Enterprise level direct employers the first to adopt performance
The primary customer group buying the pay-per-performance service is enterprise sized direct employers. When you have a single point to send candidates to like a career site, performance job advertising becomes a marketing exercise where you drive candidates to an end point.
The challenge for a recruiter uptake of performance
The model for most recruitment agencies is a group of consultants that are given their own quota of adverts to post out. Breaking that down and assigning it to a monthly budget becomes tricky when it comes to performance as it’s hard to ensure each recruiter has a fair amount for their jobs. This is the challenge in the performance market for recruiters. It’s why duration works so well for them currently.
Many will have a fixed recruitment marketing budget for the year that is allocated out. Experienced recruiters will know roughly how many credits they’ll need to buy over the course of a year, which means the economics of it is upfront. There are opportunities to buy a performance model with a maximum budget per job or campaign and distribute that between recruiters but it takes a lot of work upfront.
The long-term future of media models is likely performance-led
10 years in the future, there’s a high likelihood that performance-based job advertising will be the main model that all customers use. What that looks like is another question. Performance can be measured in a variety of different ways and with advancing tech and data we could see models that aren’t possible right now. For example, Reed.co.uk are focusing on cost per application clicks, measuring success further down the funnel, where there are higher levels of intent. Because of this, there is a change in the point of monetisation as, with a higher level of intent, arguably the unit cost is higher.
Packages will change with greater data
If job boards are able to have confidence in the number of applications they are likely to deliver in a certain sector, location, or salary range, they’ll have a way to market a performance model like duration, for example charging x amount per unit but with the likelihood that they’ll deliver x number of applications. This is where data comes into it – the greater the access to recruitment data, the higher the likelihood that the job board can deliver the desired outcome.
The evolution of data will also change the effectiveness and cost of performance-based models. “Performance-based works when you can deliver performance,” quips Simon. That may seem obvious but there’s a huge difference between charging per application click and developing your service to maximise the number of application clicks you drive. What customers want when buying a performance service is an understanding of cost, an understanding of how quickly you can deliver applications, and the ability to upweight or downweight a campaign.
Data will help to deliver quality applications
Paramount for a recruiter is receiving high quality applications. As long as the candidate can be taken forward in the process for the job they’ve advertised or can be placed in a talent pool to be used in the future, recruiters aren’t bothered about how they pay. This is why many get nervous when paying per application as there is always the possibility that they will pay a lot for a large number of applications but that none of them will be any good.
Even if you de-risk performance-based advertising by ensuring that you only pay for what you get, if what you get is no good that is clearly an issue. Again, this is where data is so important, as well as being able to case study, giving customers confidence in the way you’ve built the model. Ultimately, a job board would go out of business if their customers were constantly unhappy.
Performance models could offer a better candidate experience
It’s been made so easy for candidates to apply for jobs and for recruiters to advertise jobs that we have ended up with an experience that isn’t great for either recruiter or candidate as ghosting from both parties has become more common. It’s the biggest frustration for candidates in every survey Reed.co.uk has done.
The performance-based model could go some way to improving the candidate experience as there is greater ability to remove content from the site. With performance, at the very moment a job is no longer live or the budget is exhausted, the job comes down. This means candidates aren’t bounced around from platform to platform only to find the job no longer exists. This is a huge benefit to the performance service.
And for the important foodie question…
“I love cooking, I find it a good opportunity to destress at the end of the day. I have two signature dishes, dependent on the weather. On a colder, greyer day I’ve perfected a slow roast leg of lamb, which falls apart on bone, with mashed potatoes and puy lentils. But my wife bought me a pizza oven so in sunnier weather I’ve become obsessed with perfecting wood-fired pizzas at home. I’ll do a roasted veg pizza and an Italian meat, rocket and parmesan one.”