By: Steve Outing
A few weeks ago, Borrell Associates of Portsmouth, Va., released a report suggesting that the newspaper industry had pretty much lost the battle over the employment sector. In the last 18 months, Borrell pointed out, the industry has forfeited 40% of its recruitment revenues, or $5.4 billion — and the research firm says that the “complete collapse” of traditional help-wanted classifieds is possible over the next decade, due primarily to the shift in employment services to the Internet. (The presumption is that while some of that huge loss is due to a lousy economy, most of those revenues are not coming back.)
But while things are abysmal for newspapers, there may still be hope. There are ways to turn the recruitment sector around, if publishers listen to the right advice.
A new research company, New York-based Corzen, may be a lifeboat for newspaper recruitment. Run by newspaper-industry veteran Bruce Murray (a former classifieds manager for Newsday in Melville, N.Y., and executive at newspaper online directory service Zip2), Corzen is focusing its first suite of data and analysis services on recruitment. The research is robust and could help newspapers figure out how to turn the recruitment tide.
Corzen initially is collecting data on the employment sector in 100 U.S. markets, creating an index that’s similar to the Help-Wanted Index maintained by The Conference Board — but much deeper and market-specific, and more current. The Help-Wanted Index surveys 51 major-market newspapers’ employment ads once a month; Corzen tracks newspaper help-wanted ads, plus the principal Internet employment services, weekly.
Corzen’s data carries a price tag — it’s meant to serve executives and managers — so I can’t cite many details here. But I can report on some interesting overall trend data.
Who’s really ahead?
One of the relevant data points is the number of recruitment ads on employment sites (Monster.com, HotJobs, newspaper-company-owned CareerBuilder) vs. help-wanted ads in print newspapers. According to Murray, the most successful online employment sites like Monster.com have an advantage over newspapers, even though many papers still attract more ads than their pure online competitors. The online sites have more ads in their database at any one point in time — because they are kept active longer — than newspapers have ads that they publish.
Let’s take a major U.S. metro market — one of the top 10 — as an example. (At Corzen’s request, I won’t identify the market.) For employment listings for jobs available in this specific metro area, Monster.com has two-and-a-half times the number of ads in its active database as the dominant local newspaper has. (CareerBuilder, which is owned by Gannett, Knight Ridder, and Tribune, comes in with about 25% fewer listings than Monster.com; Yahoo-owned HotJobs has only a couple percent more listings than the local paper.) In any seven-day period, that newspaper still receives more new ads for this market than does Monster.com — but Monster.com and the other online employment sites keep their job listings online for much longer. The typical newspaper employment ad is purchased for the Sunday paper, then runs through the rest of the week, or runs in print on Sunday and online for seven days.
According to Murray, even though Monster is not beating newspapers at the local numbers game yet, its active-listings inventory is bigger. And if you are a job seeker, which looks better? Probably the database with the most jobs in your hometown to choose from. Because of the perception that “more is better,” some job seekers view Monster.com as better than the local newspaper when it comes to looking for local jobs. While the online job sites hawk paid listings for 30 or 60 days, newspapers typically sell 7-day increments, which puts them at a disadvantage when viewed from this perspective. Perhaps it’s time for a change that would keep newspaper job listings online longer? If you do this, make sure it’s easy and painless for employers to cancel listings for positions that get filled.
The need to do more
Part of the problem is that the majority of newspapers have left themselves in a poor position by taking the easy approach to online recruitment and doing little more than porting their help-wanted ads to the Web. While the online recruitment industry has gravitated toward resume-matching services and databases — providing services that get on the human-resource manager’s computer desktop — many newspapers still cling to the model of selling help-wanted ads and charging an upsell fee for posting the ads online without offering much more.
As Murray points out, what’s not commonly understood throughout the newspaper industry is where recruitment money is being spent. In one sample top-10 U.S. metro market, only 12% of recruitment spending is currently going to local newspapers, according to Corzen’s data. Meanwhile, the biggest chunk of recruitment spending is going to temp agencies — about 44%. Some 30% is being spent with placement agencies. That should indicate that newspapers will want to explore how they might begin offering non-traditional services that go after some of that money.
Murray thinks that a significant area for potential growth for newspapers is in the low-/unskilled-worker category. There needs to be a venue for such workers to find hourly jobs, other than temp agencies and placement offices. There’s a lot of money at stake, and many newspapers for the most part ignore this category because they’ve priced themselves out of the market for recruitment advertising from small employers seeking low-paid workers.
Among Corzen’s data are charts of newspaper recruitment pricing, which show that newspapers are no bargain compared to the online-only competition. For a Sunday print recruitment ad in a major paper with circulation over 400,000, prices range from under $200 to over $800; additional fees for posting the ad on a newspaper’s Web site vary from nothing to $200. A single job posting on Monster.com costs $305, but lasts for 60 days. HotJobs and CareerBuilder both charge less. (Many employers pay a $200 online upsell to newspapers affiliated with CareerBuilder.) Many employers who list lots of jobs get volume discounts from the online recruitment services. Meanwhile, newspaper recruitment-ad rates have climbed significantly in recent years.
A significant chunk of online recruitment services’ revenues come from selling access to resume databases. Access accounts typically are sold in multi-month amounts and are in the several-thousand-dollar range for Monster.com, which has a database of 20 million resumes. The newspaper industry’s CareerBuilder “is doing the right things” in offering services like resume databases, says Murray, but it still lags behind Monster.com, with a database of 2 million. Murray also lauds washingtonpost.com for doing a “good job in rethinking the business of providing recruitment services.” That site has invested the money into developing services that reach into the desktop of the HR professional, such as e-mail candidate search agents.
Peter Zollman, founding principal of consultancy Classified Intelligence in Altamonte Springs, Fla., says that is exactly what more newspaper executives need to grasp — that future recruitment revenues are mostly going to come from services for the HR professional and the job-seeker that go far beyond job listings. The future for newspaper recruitment, he says, must come from providing online tools like candidate screening and assessment.
What the online revolution has brought to HR offices is a flood of applications — more than they can handle or even respond to. Zollman says that the next wave will be automated tools that help HR professionals weed out the appropriate and qualified candidates from the huge pool of potential job candidates, and even test or pre-screen people to see if they have the knowledge that a position requires.
The days of newspapers sitting back and accepting job-listing orders (and indeed, the days of Monster.com, et al doing so) are just about over, Zollman says.
The wrapping phenomenon
An online recruitment trend that’s significant is “wrapping.” The term means contracting with major employers who post job openings on their own Web sites to “scrape” the ads from the corporate sites and post them as part of an online recruitment database. Companies can save money this way and still get the exposure that a service like Monster provides.
Should newspapers be offering this type of service to the major employers in their towns? Some already do. But the inclination might be to avoid this, as it drives down the price of recruitment advertising. But the issue here is that the online recruitment services are doing it and will do it in the future. The largest employers can post their own job listings and by virtue of their size and brand strength attract job candidates directly to their sites — so they’re not as inclined as in the past to pay high rates for newspaper recruitment ads. This trend could force employment-ad pricing down over the next few years.
What all this points to is that traditional help-wanted ads indeed are in deep trouble. The stars are lining up all wrong for newspapers that think they can continue to publish listings and not do much else.
Zollman says that a growing minority of newspapers are doing good work in the recruitment sector. He cites the Houston Chronicle as his favorite, followed by The Washington Post and The Boston Globe. Each of those organizations is developing services that reach the HR professional at his or her computer desktop. And each is acting proactively in selling recruitment services rather than the newspaper-industry norm of sitting back and taking orders.
Zollman disagrees with those who are pessimistic about the recruitment outlook for newspapers. “Monster.com is brilliant, but Monster’s future is not guaranteed,” he says. “This battle is far from over,” and newspapers have as much a chance of prevailing as do the Monster.coms of the world. The key is to recognize where future recruitment revenue will originate, and develop those services. The online-only job sites realize this and are working toward that aim. “The question for newspapers is, will they act fast enough,” Zollman says.
Corzen’s Murrary agrees. “I don’t think we’ve lost the recruitment sector,” he says. In many U.S. metro markets, market share for newspapers still looks good, and many newspaper executives understand the new recruitment landscape.
Murray suggests that newspaper executives need to start thinking more like the online-only services. Instead of thinking, “How can I take what I have now and get it online to make money?”, think, “If I was working from a blank slate, what would I offer for online recruitment services?” Answers include developing services that get used by HR professionals, and creating ones that attract some of the huge amount of money currently going to temp and placement agencies.
The real danger for the newspaper industry right now is in its “bunker mentality” response to the poor economy. Now is not the time to sit back and wait for conditions to improve. The industry’s charge in the next couple of years must be to get back some of those billions of lost recruitment dollars. But the money will not come from anything resembling the classic “help-wanted” ad.
To read more about Corzen’s research, including data that suggests newspapers might be able to boost their online recruitment rates, click here.
Are these the best examples?
In your recent column, “News Sites Need To Go On Diets,” you mention Google and IHT.com as two sites newspapers should examine in designing their home pages. I don’t want to disparage these sites, because both are very good, but I seriously question whether they are the best examples for defining the future of online publishing.
First, take a look at Google. The site’s popularity is because of its best-of-breed search engine, not because of its design. If another search engine came along that helped people find what they were looking for better than Google, people would switch in droves, regardless of Google’s interface. You were right in noting that comparing news sites and Google is like comparing apples and oranges. Google has a single pupose, to let people keyword search the Web. A news site’s purpose is much more complex. However, as I’m sure you’re aware, Google has recently jumped into the news business. You should have compared their news page to a standard newspaper’s home page. That would have shown that not even Google has a secret simple formula for presenting the mass volumes of news that fills the Web every day. On Nov. 11, their news page had 308 links with 93 headlines. Washingtonpost.com looks downright anorexic compared to that hodgepodge.
Next you mentioned IHT.com. You’re right, it is a cleanly designed site, but there are two problems. First, this site, again, has a much simpler purpose in the type and amount of information it needs to present. Second, I feel it fails to adequately inform the reader up front of what information is available on the site on any given day. Simply stated, I don’t think they show enough on the home page. The problem is online papers can’t act like print papers. In print, a reader knows exactly how much information is there because it’s all in their hands. They can read from front to back and know they didn’t miss anything. The Web is like a deep, dark hole. Unless you have a well-crafted, informative home page, the reader has no idea what can be found inside. And most of us, which is who newspapers must cater to, don’t have the patience to find out. IHT.com is the type of site that rewards the curious but that only works with the information elite, not the general masses.
I tend to side with assistant professor Andrew Devigal’s opinion that “long home pages with many links are not necessarily a bad thing … as long as they are organized well,” which is why I don’t think newspapers are that far off in how they’re presenting the news. I believe there’s a method to their madness and it all revolves around a new type of reader that I call the home page news hound. These are people, including myself, who visit only the home page of a news site to see if there’s anything of interest. If nothing catches their eyes then they move on to the next site on their favorite’s list. A mantra could be ‘If it’s not on the home page, it’s not important.’ Some might find such an attitude foul, but ask yourself why is the dreadly ugly and cluttered Drudge Report one of the most popular news sites on the Web. Maybe, newspapers shouldn’t be trimming down, but bulking up (in an orderly fashion, of course).
The reality is…
In principle I agree with you completely. But the reality is that we know from tracking audience that generally speaking an article or feature not linked off the home page gets less traffic than one that is linked off the home page. Very different paradigm than a several-section newspaper (based on readership surveys, of course, you can’t really track what they’re reading in a newspaper). The question about how many links there should be on the home page is really quite complex, and frankly I don’t think any of the major news sites have come up with the perfect answer.
Meanwhile, we try very hard to provide a clear hierarchy on the first screen, then use organizational principles that make sense on the rest of the page.
Doug Feaver, Editor
The irony of ads
Read your article: “News Sites Need to Go on Diets.” I found it ironic that an ad in the left rail on the page with your article was for a service offering “daily news, digital photos and charts” from Billboard.com. The imagery shows a skinny guy and asks, “Does your Web site’s content look like this?” then becomes a muscleman and says “Do you wish it looked a little more like this?”
The point is…
I think you missed the point. Washingtonpost.com isn’t just a news site, as The Washington Post isn’t all about the news. It’s a business. They hawk everything from used cars to dates for Saturday night. And finally, it acts as a promotional tool for its paper. But if you can read, you can negotiate it.
Google News does what they do great. But remember that they’re producing a news page with no editors. NO EDITORS! And frankly, many in the news business, myself included, would prefer to be working than getting our news from an algorithm.
Take a walk on the flip side
Nice article, Steve. However, perhaps it is a bit one-sided. Or, maybe you can explore the flip side in another article? What I mean is that, just as a print newspaper forces some serious editing because of physical limitations, perhaps Web pages force other good and bad activity because of the logical and programmatic constraints of Web pages. For example, HTML is not friendly when it comes to typography and font use, but with newspapers, the sky is the limit. See what I mean?
Stuff and praise
Couple of thoughts on your home-page column:
1. Home pages need more “stuff” than print front pages because, as the professor whom you quoted noted, they are the gateway to the whole site. Readers don’t skim a site the way they do a paper, nor can they disassemble the site the way they do the sections of a broadsheet.
2. Google deserves praise, but its new news page is probably a more apt comparison than its home page. The home page of a search engine is a much different animal than a news page.
All that said, IHT.com’s 70-some links probably are preferable to washingtonpost.com’s 200-plus. And, one of my favorite home pages of all time was the one-screen page that The New York Times had back in ancient times.
Todd Engdahl, Editor
Small papers are phat, not fat
It occurred to me while reading your column on fat, but not phat, home pages that smaller newspapers may once again have it right. Their home pages are slim because they don’t have a staff to fatten up the page. Most often the pages are built using a template provided by some outside source that also hosts their site, and the content is posted by a newsroom clerk. And it’s almost always all local content.
Mark Van Patten
Daily News, Bowling Green, Ky.
Other recent columns
News Sites Need To Go On Diets, Wednesday, Oct. 30
Out With the Old Advertisers, In With the New, Wednesday, Oct. 9
Google News Could Change Online News Industry, Wednesday, Sept. 25
Don’t Hide Your Multimedia Content, Wednesday, Sept. 11
See the News Of the Future At Starbucks, Wednesday, Aug. 28
Examing Paid Content’s Future, Wednesday, Aug. 14
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