Media economy

What's behind the
dip in job ad spending

Hiring is up but employers are turning to other means to find applicants

Mar 9, 2012
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Though the nation's unemployment rate has been going down, a trend expected to continue when the latest numbers are released today, that's not helping the nation's employment ad carriers. Advertising on recruitment, or want ads, is expected to continue trending downward over the next few years, according to a recent report by Borrell Associates, the Williamsburg-based local media tracking firm. Ad spending is falling despite the fact that more companies are hiring now than they were a few years ago. Employers are increasingly relying on internal means of getting the word out about job openings, like internal job boards and word of mouth, rather than external means like advertising. Borrell predicts that recruitment spending on newspaper advertising will drop 11 percent this year, to $1.178 million, while other print outlets will see ad revenue dip 12 percent, to $842.3 million. Broadcast, including TV and radio, will be down 8 percent, to $534.78 million. Online, meanwhile, will see a short-term decline as employers move away from general-interest job sites like Monster and toward more specialized sites such as college alumni associations and trade publications. Kip Cassino, executive vice president at Borrell Associates, talks to Media Life about unemployment, why even online is suffering, and how that might change over the next few years.

What are some of the underlying issues leading to the decline in recruitment advertising?
One of the biggest reasons is that the companies who recruit have decided to internalize a lot of things they used to pay for with other people.

The big movement has been what they call internal staffing. Instead of going to Monster or CareerBuilder or even a full-line recruiting agency, these guys will do it themselves. That has come from their success in getting people to apply for these jobs through listings on their own database.

Are all media seeing equal declines in advertising, or are they sharper in some areas? Why?
When we look at job boards we tend to look at the big guys, the Monsters, the CareerBuilders, HotJobs, those guys.

But they have shown greater attrition than the more specialized job boards, and there are thousands of them. Every industry association has at least one. Most college alumni associations have theirs. Most industry magazines have one of their own. There are special job boards for almost every kind of employment. So these specialized guys have been less hit by this than the bigger more generalized boards have been.

The generalized boards have seen a lot of slacking, and the metro newspapers have seen more erosion than the smaller local papers. And people are doing less experimenting with TV and radio than they used to do. I'd say the biggest losers have been the generalized job boards, but the local papers have also lost quite a bit.
What did you find most interesting or most surprising about this report?

What stuck out to me was that there are so many kinds of numbers flying around about jobs, and I hate to be the dog in the manger about it, but frankly the unemployment does not look good.

If the only way you can lower it is to have folks dropping out of what we count as unemployed, that's in my book not a way to get rid of it. When you look at the number of jobs available for people to go and get, what surprised me this year is it's tightening up. Maybe that's a function of people saying, "I don't want to move around, I want to stick to what I've got."

Even though they're very closely correlated, a reduction in job openings doesn't necessarily mean a reduction in the level of unemployment.

Why is outdoor recruitment advertising actually forecast to grow? Can you give an example of an outdoor recruitment ad?
I have family in Tucson, Ariz., and I drive out there and see billboards that say there are job openings at Raytheon. You'll see these and what's interesting is they're immediate and very local and you can tag them to where the traffic is going and the kind of person you want to get driving down that road.
And then you've got transportation advertising, which is also part of it. If you're on a subway you might see an ad for an employer. We see more of that coming because we see out-of-home increasing in general.

How has the state of the labor market impacted recruitment advertising over the past few years?
Certainly the labor market has impacted the recruitment advertising space dramatically in the last several years. If I don’t have as many jobs to fill, I'm not going to spend the money, it's just that simple.

Would recruitment advertising be stronger if the unemployment rate dropped?
Sure it would.

But you've got to remember, recruitment advertising is not like selling packaged goods. It's not an ad expense, it's a human resources expense. There are lots of other things people can do to get new employees besides running an ad. In fact, running an ad is only about 12-15 percent of the total spent on recruitment; most of the money goes to agencies, whether it's temp agencies or full-blown recruitment agencies.

There is some money spent on job fairs, some spent on college recruiting. There's a growing amount of money being spent on materials at the job site--next time you go to a Target store, look and you'll see a computer terminal set up where you can sit and apply for a job. This is a growing trend. It's so much easier than having some guy in a booth saying, "give me your resume."

What are the most popular sites to advertise online for jobs and why?
The specific job boards, it really depends on the kind of job and where it is. If we're talking about local jobs in smaller communities, the newspaper and what's associated with it is still No. 1. The small-town paper now also includes the small-town newspaper web site. Whenever things are very locally focused you'll see more attachments to local media as opposed to job searches that have specific skill sets, where filling the resume is far more important than the locality of the person that's taking the job. Those will still go to the various job boards or headhunters who can find those people.

What's frustrating about that is a lot of the most skilled people are baby boomers, and they're retiring.

Also, it's getting harder and harder to move a person from one locality to another. It's very difficult to sell a home these days, so you have additional impediments to mobility that make it that much harder to find the person you want if that person isn't relatively local to the job site.

Are newspapers making up for any of their lost print recruitment ad revenue with online?
Some are more successful at that than others. You're talking about a fall from grace that has been very, very dramatic. In some of the bigger metro papers, recruitment was 50 percent of classified ad revenue, and in some papers I know it was 50 percent of all advertising.

Now when the recruitment dollar flowed away from newspapers, it's very, very hard to replace that kind of revenue stream. For papers that had that much coming out of the recruitment space, it's been very tough.
Certainly online advertising has helped, and newspapers were the first to really go big with online advertising in most markets, so they've had more practice at it and have had a predominant share of the local online advertising, but they have more competition now.

The local TV stations are competing for the local online ad dollar, the directory people are as well, and they're all very well trained and have lots of sales people on the street. So it's tougher for newspapers to keep their share than it was, say, two or three years ago. They're trying hard to replace what they can, but it's a tougher go than it was.

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Diego Vasquez is a staff writer for Media Life.

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