Robust spending in the sector is hurting newspapers
Online recruitment advertising is healthy and growing. The category nearly tripled in size in 2005 to $3.5 billion, according to Borrell Associates, capturing more than one-third of all recruitment media budgets. And the research firm projects that online recruitment revenues could triple again in 2006, noting that, in a few years, online will garner more share and more ad dollars in recruitment than all newspapers.
By comparison, newspaper revenue grew 17 percent in 2005 versus 2004, Borrell says, while overall recruitment spending across all media grew a mere 1.7 percent. Meanwhile, traditional media such as radio, TV, and cable are growing recruitment revenues, at twice the rate of newspapers, according to the market research firm.
“Companies are getting smarter about how they’re using online media,” says Kip Cassino, Borrell’s director of research. “And because of that, the model has changed from an upsell to a downsell.” In the past, he says, print was the main buy and online was the add-on. That’s now the exception rather than the rule. Today, more often online is the buy and the print is added in for a nominal fee.
The growth in online is fueled in part by the proliferation of niche job boards, such as h3.com, where people get referred for jobs by members of their friends and family; Mkt10.com, which matches people’s skills to appropriate jobs; and Indeed.com, which crawls all recruitment sites and aggregates the listings, and which recently received an investment infusion from The New York Times.
Increased hiring needs will continue to drive up recruitment advertising for at least the short term. Manpower Inc. predicts that hiring will continue to increase throughout the year, achieving 29 percent growth by the fourth quarter of this year.
Major print media will be slammed by 2008, when Borrell projects that employment will hit a zenith and begin a cyclical decline. However, suburban and community newspapers, which tend to advertise for local markets, are better insulated against a downturn, Borrell says. Metro dailies are expected to lose an average of 2.7 percent in recruitment revenue annually. Suburban newspapers, on the other hand, will increase this category by 4.2 percent annually through 2010.
Of all recruitment spending in any media, temporary placement garnered the largest share of any category, with 45 percent, while the lowest amount, 0.4 percent, was spent on college recruitment/job fairs.
Over the next five years, the greatest growth for suburban newspapers will be in the unskilled labor, skilled labor, and clerical/administrative job categories. “These kinds of positions are local market-oriented,” says Cassino, “and suburban newspapers will exploit this niche with low-priced combo print/online packages.” Conversely, he says, metro dailies’ high rates will contribute to their downfall.
Future shifts are expected to be gradual. “I don’t think there will be any tremendous change over the next five years,” says Cassino. “Instead, I think you will see refinement of things that have already taken off: more emphasis from the print publications on their online recruiting site and less on their print recruiting. This is especially true with organizational and b2b publications.” In addition, Cassino says he expects to see more growth in niche markets and site specialization.