Can Newspapers Win Back Job Classifieds?

By: Lucia Moses "Help Wanted" has taken on a double meaning at newspapers in the past few years. These days, the phrase applies not only to a category of classified advertising they seek, but also to the new ideas those departments need when facing tough competition and a rough job market. One notable exception to this trend may be The Palm Beach Post.

Florida has actually been a job creator the past year, so help-wanted advertising hasn't plunged like it has in other parts of the country. Meanwhile, the paper has expanded its portfolio of recruitment ad services, better positioning it to capture the market's ad dollars. Thirty newly-installed job kiosks in libraries and other public spaces seem especially promising. So popular are the kiosks, which let people search from roughly 4,000 jobs, that a library had to enact time limits "so people don't spend so much time on them," says Dan Shorter, general manager for the Post's Internet operations.

Still, Shorter hasn't let down his guard. "You've got Monster and others who want to poach your market," he says. "The recruitment business is evolving every few days, not every few years. We'll never feel comfortable again."

He's referring, of course, to the online career site whose flamboyant founder, Jeff Taylor, threatened to put newspapers out of this business a few years ago. And while newspapers may have fought back and taken a bite out of Monster.com's advantage for now, few are writing off the big board.

And it's not just national behemoths that newspapers have to worry about when the job market starts expanding, as many predict will start happening next year. Niche sites abound. Corporations, community Web sites, and college alumni associations also are helping themselves to the help-wanted ad pie. The efficacy and low cost of searchable online recruitment ads has TV and radio outlets looking at help-wanted as a new source of revenue, too.

"A lot of competitors smell blood because of the hemorrhaging of the business," says Gordon Borrell, president of new media consultancy Borrell Associates, Portsmouth, Va. "The fight is never over," agrees Charles Diederich, director of marketing and advertising for the Newspaper Association of America. "I think Monster is still a very savvy marketer. They're going to continue to be a very key player." He also sees niche and corporate sites growing in importance.

Newspapers today

Since late 2000, newspaper recruitment classified has gone from representing, at its height, nearly 19% of total industry revenue, to less than 8% this year, according to Goldman Sachs research. But inconsistencies in the way companies report their help-wanted revenue and different ways of measuring the size of the overall market make it nearly impossible to say definitively what share of total help-wanted spending newspapers have lost.

Peter M. Zollman, founder of Classified Intelligence LLC, an online classified consultancy based in Alamonte Springs, Fla., says estimates put newspapers' share loss at anywhere from 5% to 15%. In any case, the bigger the market, the tougher the competition with online biggies, which often have a price advantage over the printed newspaper.

In a recent report, Goldman Sachs newspaper analyst Peter Appert predicted good times ahead for newspapers, however, noting their ability to offer print and online at sometimes-lower rates than their online-only competitors. A recent survey of about 240 U.S. dailies by New York-based online classified researcher Corzen showed that 63% let advertisers buy an online ad only, up from 32% in 4Q 2002. And newspapers, to a degree, have awakened to the online threat and are offering more ways for advertisers to reach job seekers, on and offline.

The Dallas Morning News is one such example. "When I came here in '98, we were just trying to keep up with the orders coming in," says Lisa Virgoe, the then-classified manager who became recruitment ad director for the paper two years later. "I would say we've become much more creative and much more consultative." The paper has launched six new products in the past 20 months, often aimed at the hourly job market. An internal analysis showed the paper has since regained some business it lost to online and niche players, Virgoe says.

But Zollman predicts that, overall, newspapers' share will decline "for a long time" because many have responded too slowly to employers' needs. One unnamed East Coast daily, he says, only added an online job search tool a couple months ago. "This is a major market," he says. "The paper threw away a couple years of opportunity and sent its advertising to competitors." Here's a look at how those competitors, new and old, are positioning themselves:

Big Boards

Monster still holds the top spot among the big job boards, but CareerBuilder LLC and Yahoo! HotJobs have gained ground.

Two key events of the past year gave CareerBuilder a boost: It added Gannett Co. Inc., with its 99 local U.S. dailies, as an owner (joining Knight Ridder and Tribune Co.), and displaced Monster as the jobs content provider for America Online and MSN (the deals are slated to take effect by January).

CareerBuilder COO Matt Ferguson predicts the site will close in on Monster's traffic lead by January and take "substantial revenue and market share" from it next year. While Monster has tightened its focus on better-quality matches and the blue-collar market, Zollman declares CareerBuilder has the lead in that segment for now. He explains, "When we search Monster for blue-collar and hourly jobs, we do not find very many. Whenever we do the same search on CareerBuilder, we find lots."

But Joe Shaker, president and COO of Shaker Recruitment Advertising & Communications in Oak Park, Ill., with projected annual sales of $100 million, says it's unwise to underestimate the incredible hulk. "Nobody has spent the money like Monster has," he says. "Dollars don't lie, and they still get the lion's share." (Monster did not respond to interview requests for this story.)

The big boards still lack the ability to deliver the best match for employers, says Tim Gibbon, president and CEO of recruitment firm JWT Specialized Communications in New York. "The biggest problem with all the job boards is the quantity versus the quality," Gibbon says. That's where Yahoo's HotJobs hopes to get the edge: While Monster and CareerBuilder slug it out, HotJobs is betting that better matching tools will be its ticket to the top.

Niche sites

Given employers' desire to cut through the resume clutter, the growth of niche sites is hardly surprising. Peter Weddle, publisher of Weddle's Media Report, says the tens of thousands of specialty job boards and career portals he estimates are out there are "the real threat to newspaper advertising." Niche sites are increasingly specialized, rich with content, and profitable, Weddle says, and allow employers to access more qualified applicants at a relatively low cost.

Two worthy of note are www.healthcareers.com, a 10-year-old portal to job banks representing some 37 medical associations, and www.thelccn.com, a shared network of more than 90 legal career sites. Then there are the college alumni association sites, special-interest magazines, and accidental niche sites, like Craig's List (www.craigslist.org), which started as a community site in San Francisco and is trying to replicate itself in other cities.

Diederich predicts niche sites will continue to take share from big boards and ultimately newspapers, as cable television did from broadcast TV. Some papers have responded by turning would-be competitors into allies. Rick Miller, CEO of CareerCast, a Carlsbad, Calif.-based job board solutions provider, declares a "huge trend" underway of papers cross-selling and cross-posting with professional-interest sites: "I would say more and more newspapers are waking up the realization they're not controlling the world."

Broadcast TV

Given their late start in the help-wanted chase, broadcast TV might easily be dismissed as a competitor, given print's longstanding relationship with HR managers. But some broadcasters are realizing that their power to reach the passive job seekers, and drive them to job listings on their Web sites, can have big advertiser appeal.

Want-ads are a natural first step for broadcasters looking to grow beyond their limited on-air inventory, explains Mike Blinder, president of the Blinder Group, a multimedia sales consultancy based in Tampa, Fla. "'Non-traditional' revenue - that's the whole new buzzword in broadcasting," he says. "The first place they're looking for it is in classified advertising."

In most cases, TV stations are taking a passive approach to help-wanted through deals that put HotJobs or CareerBuilder listings on their sites. The stations invest nothing, and the job boards get local exposure. But a few are trying to sell ads themselves. New York-based WorldNow, which provides Internet technology and publishing services to 143 local TV stations, is encouraging those stations to pick categories of help-wanted that make sense for a TV audience, and giving them tools from CareerCast, says Sandhi Kozsuch, a WorldNow executive vice president. With TV, Kozsuch says, "you are going after passive job seekers. People who go to newspapers are actively engaged in looking."

Among the aggressive few WorldNow is helping is Greenville, S.C.-based Liberty Corp., owner of 15 network-affiliated TV stations. Liberty has been testing help-wanted sales at three of its stations, with plans to roll out sales groupwide in the year ahead. Vice President of Strategic Development Ronald F. Loewen readily admits its share of the help-wanted market is "infinitesimal" now. But when it grows, he says, it'll come at newspapers' expense.

"We're not going to be the competitive equivalent of newspapers. We're going to go after niches," he says. "We know we've got a chance. For four years, we have put an incredible amount of effort into building credible Web sites." Last year, he says, online revenue accounted for 5%to 7% of total local station revenue, money that didn't exist four years earlier.

How much should this TV activity worry newspapers? For now, not much: "They don't understand the [online] technology as well, they don't understand the advertising segment," Borrell says. Most TV Web sites aren't rich enough to attract enough audience worth selling to advertisers, Corzen CEO Bruce Murray says.

But over time, that may change. "They have realized good dollars, but it is going to take time," Kozsuch says. "I think if a station gets aggressive, they could pull 2, 3, 5% of employment dollars out of a market." Borrell sees stations eventually packaging image ads on TV with online ads, as it's already doing for the real estate category, noting broadcast's branding ability superiority over newspapers. Blinder sees cable, too, promoting on the airwaves ads that can be searched online. "On a senior level, it's being discussed," he says. "Within one year, they'll be in it hot and heavy."

Radio

Radio tried to ride the help-wanted boom of the late '90s, but those efforts mostly fizzled out. Now it's most visible foray is likely RegionalHelpWanted.com Inc., a network of more than 250 local job sites in North America. Under a you-promote, we-pay model, radio stations run spots for the local site and get a share of the money from the online ads generated by the spots. Starting Jan. 1, RHW also will get promotional help from billboard companies in Detroit and Harrisburg, Pa., in exchange for a cut of the revenue, President and CEO Eric P. Straus says. (RegionalHelpWanted also gets listings content from staffing agencies and national job sites.)

Of all his company's sites, Straus says 30 to 40 are "very strong," with "our best sites doing over a million a year" in revenue, and the top 30 sites renewing ads at a 60% to 80% rate. Until recently, radio promotion was the primary traffic driver, but Straus has hired sales reps in five markets, whose number he hopes to increase to 15 by mid-2004 (by asking radio station affiliates to give up some of their revenue share).

In Poughkeepsie, N.Y., where the company is based, you can't turn on the radio without hearing a promo for the charter site, HudsonValleyHelpWanted.com, which has partnered with almost all 21 local radio stations. And while the site listed just 427 jobs on Nov. 25 to 762 on the electronic version of the Poughkeepsie Journal (a CareerBuilder affiliate), that paper's Classified Ad Manager Jeff Reis isn't pooh-poohing the competitor. HudsonValley has "very clever marketing, and they're directly going after newspapers in their ads," Reis says.

Although the paper is developing an hourly job product that will make it more competitive with the radio-promoted site, Reis thinks "it's inevitable" that the Journal will lose share to Hudson Valley. "Is it going to be a great deal? I don't know."

Slower-going is RHW's search for partnerships with local papers that lack robust online job sites. It already has agreements with a cluster of one daily and seven weeklies near Sacramento, Calif., owned by San Diego, Calif.-based Brehm Communications; and two alternative weeklies. Straus sees radio's big advantage in its ability to reach young, passive job seekers. "My view is, newspapers are in the unfortunate position of reaching mostly older demographics," he says. "That's great for reaching employers, not job seekers."

The Future

In the long term, papers that will do best in garnering share are those that provide it all: Products that meet the demands of employers, active and passive job seekers, and fill both higher- and lower-end jobs, where the greatest labor shortages are expected.

Weddle, of Weddle's Media Report, says the Web has fundamentally changed the job-search process: "Eighty-four percent of the population is passive job seekers and looking for a different kind of experience. They're looking for career content. Newspapers, to the extent they have Web sites and career-related content, will be more attractive to the best and brightest."

For the employer, says Gibbon of JWT Specialized Communications, "the newspapers that do best will be the ones that put together, as best they can, online and offline solutions and packages."

And so at The Dallas Morning News, Virgoe will focus next year on improving the sophistication of the paper's job seeker-to-employer matching services. One plan in the pipeline is to invite people who respond to job ads via the paper to take skills or personality tests, and forward the results of the top scorers to prospective employers. While some of the fast-growing supplemental products recently launched may never achieve the high profit levels of the newspaper's print classifieds, she says, "I think this is the way some of the business is going to go in the future."