Online Job Ad Revenues Surpass Print

by Mark Walsh, Dec 20, 2006, 6:00 AM

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Employers spent more on online recruitment advertising than newspaper job ads--$5.9 billion to $5.4 billion--for the first time in 2006, according to a new study released Tuesday.

The online shift will continue over the next five years as Internet job listings hit $10 billion in 2011--or 13.7% of overall recruitment dollars compared to 6.5% for newspaper ads, according to market research firm Borrell Associates Inc.

"Our projections through 2011 do not bode well for traditional recipients of recruitment spending," stated the report. "Of all forms, the only ones we see growing share over the next five years are online media and recruitment agencies."

Much of the online growth is expected to come from small and medium-sized businesses posting local ads for hourly and part-time workers. Already, two-thirds of online job revenues are generated by niche boards or regional Web sites focusing on specific categories such as nursing, technology or food services. Rivals Monster and CareerBuilder, respectively, control 14% and 12% of the online job market, while newspapers not affiliated with either job site claim 8%.

Monster has taken aggressive steps this year to boost its share of local job ads by forging partnerships with newspapers dumping CareerBuilder such as The Philadelphia Inquirer, the Wilkes-Barre Times Leader and the Akron Beacon Journal. Yahoo's HotJobs also made a play for more local classifieds, striking agreements with eight publishing companies representing more than 200 newspapers nationwide.

The Borrell report, however, questions whether these alliances will benefit newspapers in the long-term. "In the end, the newspapers that fled to Monster or HotJobs wound up doing exactly what they shouldn't: Abandoning a billion-dollar investment in their own product and building up brands they have spent years trying unsuccessfully to degrade," the report stated.

The study warned that the deals may not turn out so well for the online partners, either. Because papers rely heavily on converting print advertisers to online ones, Monster and HotJobs may find revenue gains elusive. "As recruiters slice their print budgets, the associated online revenue will fall as well," according to Borrell.

While the moves made by Monster and HotJobs grabbed headlines this year, the spread of specialized job sites generated much of the online ad growth. The report cites SnagAJob, which focuses on hourly jobs, as an example of a fast-growing targeted site used by employers including Home Depot, 7-Eleven and Target. These sites are also creating features such as blogs, podcasting and videocasting to help create a sense of community around careers.

Help wanted ads for blue-collar workers represent the biggest growth opportunity. Unskilled positions including transportation jobs accounted for 46% of job openings in 2006, but fewer than 2% of these were listed online.

While free-listing sites such as Craigslist and Google Base have been seen as among the biggest threats to newspaper classifieds, the Borrell study said only that they'll "continue to take bites out of the recruitment listings and revenue pies."

With only about one-third of U.S. job-seekers saying they planned to search the Internet for work in 2006, the report projects plenty of upside remaining for recruitment spending online.

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