When job boards first emerged, most operated on a fixed, duration-based model. However, the rise of cost-per-click (CPC) job boards has shifted the way employers and job seekers interact online.
While Indeed wasn’t the first to introduce the CPC model, it was the platform that popularised it, reshaping the recruitment industry in the process.
In this article, based on a podcast with Steven Rothberg, we’ll explore how CPC job boards work, their advantages and challenges, and why this model has become a crucial part of recruitment advertising today.
What is a CPC job board and how does cost per click work?
A cost-per-click (CPC) model is a performance-based advertising method where employers pay a fee each time a job seeker clicks on a job posting. Unlike the traditional duration-based job ad, where the cost remains fixed regardless of performance, the CPC model ensures that employers only pay when a job seeker engages with the listing.
How CPC job board pricing works in recruitment
The mechanics of the CPC model are relatively simple. When a job seeker searches for a position on a job board, they’ll see a list of job descriptions. Upon clicking the “Apply” button or a similar call-to-action, this click triggers a charge to the employer. The fee may range from £0.50 to several pounds per click, depending on factors such as industry, job type, and platform.
Once the candidate clicks, one of two things usually happens:
- Application on the job board: The candidate is taken to an application page hosted by the job board itself. They complete and submit the form, which is then sent to the employer’s applicant tracking system (ATS) or CRM. Sometimes, the application arrives via email.
- Redirection to employer’s site: In some cases, the candidate is redirected to the employer’s own career site or application page. From there, the application process is completed outside of the job board.
Benefits of CPC job advertising for recruiters
- Cost Efficiency: Employers are only charged when a job seeker actively engages with the job listing, offering more transparency and control over recruitment budgets.
- Performance-Based: Unlike the duration-based model, where employers pay regardless of ad performance, CPC ensures that the investment is tied to actual candidate engagement.
- Real-Time Adjustments: Employers can adjust their campaigns based on performance, increasing bids for higher visibility or lowering them if the cost per click is too high.
- Better ROI Tracking: The CPC model makes it easier for employers to track their return on investment (ROI) as they can directly link spending to job seeker activity.
Drawbacks and challenges of CPC job board pricing
- Low Conversion Rates: With only about 5% of clicks turning into applications, employers need to factor in the cost of many clicks that don’t yield direct results.
- Unqualified Clicks: While some candidates might self-filter, others may click without fully reading the description, leading to wasted spend.
- High Competition: Popular job boards can create fierce competition among employers, which drives up the cost per click as companies vie for visibility.
Why conversion rates can be a challenge in CPC job ads
While CPC models offer the advantage of paying for actual engagement, they also come with their own set of challenges. One of the most significant is the conversion rate. Steven Rothberg notes that, on average, only about 5% of clicks convert into actual job applications. This means that for every 20 clicks, only one results in an application. This figure is relatively consistent across industries and job boards, although it can vary depending on the employer and specific sector.
While some employers may see this as a downside, it’s important to understand why not every click results in an application. In many cases, it’s a positive outcome for both the employer and the candidate when no application is submitted.
Why clicks don’t always turn into applications
Several factors contribute to why a candidate might click on a job ad but not complete the application:
- Poor Fit: Upon reading the full job description, the candidate might realise they don’t meet the qualifications or requirements, and opt not to apply.
- Employer Mismatch: Candidates might discover that the company isn’t a good match for their values or career goals. For example, they may not want to work for a specific employer or a staffing company.
- Window Shopping: Some job seekers click on listings out of curiosity without any intention to apply. This “window shopping” behaviour is common, especially among passive candidates.
- Application Complexity: In some cases, the employer’s application process may be too lengthy or complicated, deterring candidates from completing their submission.
When low conversion in CPC job boards can still be valuable
From the employer’s perspective, being happy about low conversion rates may seem counterintuitive. However, there’s an upside: quality control. Employers want qualified and interested candidates, not just anyone who stumbles upon the job posting. A lower conversion rate can mean that unqualified or uninterested job seekers are filtering themselves out, saving time for the recruitment team.
Moreover, the CPC model gives employers control over their ad spend, as they only pay when someone clicks. Even if not every click turns into an application, there’s a higher likelihood that those who do apply are genuinely interested in the role.
The cost-per-click (CPC) model has become a game-changer in the recruitment advertising space, thanks in large part to platforms like Indeed. While the model offers greater cost efficiency and performance-based pricing, it’s not without its challenges, particularly when it comes to conversion rates. However, with the right strategy, employers can use the CPC model to optimise their recruitment campaigns, attract more qualified candidates, and ultimately improve their hiring outcomes.
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