Pay per Performance, PPA, PPAS, PPC – WTF?

Pay per performance (PPP) is the current pricing model in the recruitment industry. Only pay for what you get. Pay-per-click, pay-per-application start, pay-per-application; all pay-per-performance pricing models that only charge you for what you receive. So either clicks (reach) or applications (response).

Performance-based billing models are based on the classic marketing funnel, which defines the key contact points of the target group along the purchase decision process. The “marketing funnel” serves as a symbol, which gets narrower and narrower the closer the process gets to the final purchase. These contact points can be evaluated in monetary terms. The narrower the funnel, the more valuable a contact point is. The duration of the ad plays a secondary role.

Although pay-per-click is one of the most frequently used pricing models for performance-based job boards, the pay-per-application principle has recently gained in importance.

However, with job boards using different pricing models, it can be confusing to choose the one that works for you. This blog post looks at the differences between pay-per-application and pay-per-click models, what you should consider when choosing the perfect job board(s), and what technology will help you achieve your recruitment goals.

Pay per performance models ensure that your budget is effectively allocated to your vacancies advertised on job boards to attract talented candidates to apply. But how do job boards price these services?

With the PPC or CPC model, job boards charge their customers for the number of ad clicks from site visitors.

Job boards display your ad to a large number of job seekers who are interested in your ad. This means that with a PPC model, you improve the reach of your job ad and generate interest in your company. When candidates click on the ad, they are redirected to the company website, which increases traffic to your career site.

If your job advertisement appears on a job board with forwarding to your career page, the completed application can only be measured in your applicant management system. For this reason, there are also pay-per-performance models in which the job board charges you for applicants who have started the application but may not have completed it (application start). This in turn gives you the opportunity to contact these “dropouts” again with appropriate tracking of your career site.

PPA or cost per application (CPA) means that companies only pay for the applications they receive, i.e. when the candidates have completed the application. Job boards, in turn, only offer this pay per performance model if the application goes through a process they control (no redirection to your career site) and they therefore also have the applicants' data.

Indeed, for example, recently announced a switch from a pay-per-click to a pay-per-application or pay-per-application-start pricing model.

Ultimately, the hiring process is about finding relevant talent. Reach for your job ad is just as important as finding the right candidates. In marketing, we talk about the attention (awareness) that the distribution of an ad generates; in recruiting, this is the clicks of potential candidates on your job ad. A pay-per-click model also brings you a return of applicants. However, you should measure how the ratio of clicks to applications behaves and whether your investment generates the expected response. Is your offer interesting enough to attract applicants?

In addition, different job boards have different pricing models that are offered. Some do not offer pay per performance models at all. Choosing a job board is a holistic decision based on various factors, not just the pricing model. Ask yourself the following questions to find out what works best for you and plan your recruiting strategy accordingly.

Depending on the position you want to fill, choose specialized or generalist job boards. For example, if you are looking for jobs in specialist areas such as health/nursing, IT or engineering, you should target appropriate niche job boards. Although sometimes more expensive than generalist job boards, you can build up a talent pool of qualified and relevant candidates.

Regional job boards are also interesting for companies with regional roots or regional branches or subsidiaries. Addressing potential candidates locally is an important strategic aspect, especially for SMEs.

Check the target group and reach of your job board partners as well as their ability to deliver the right candidates and the price you pay for them.

Generalist job boards appeal to a broad target group, which can definitely help your reach. Again, there are potential differences in successfully addressing different target groups; not every generalist job board works equally well for every job profile and region. Analyze the performance of your recruitment partners in connection with your various job groups and optimize your media mix.

Budgeting your recruitment efforts is essential. You do not need the same budget for every job profile. The individual recruitment budget depends on the role (easy or difficult to fill), the available candidates in the market and the urgency as well as the desired hiring time.

Often “easy job profiles” receive more feedback and applications, or even too many. Here you can optimize your investment by stopping the campaign for the position after less than 30 days, for example, and no longer spending money on unnecessary applications. Pay per performance models can offer you this option in return for the classic 30-day advertisement. This also opens up the possibility of investing more budget in “difficult job profiles” in order to shorten the recruitment time.

Wondering how to optimize your recruitment advertising spend to get the results you want? Not sure how to consolidate all these metrics and data and analyze them for strategic decisions? This is where technical solutions for the right distribution of your job ads and performance measurement can help.

Our Joveo solution offers you the best options here. Complete transparency about your relevant KPIs in recruiting (CPC, CPA, CPAS, pay & post or slot models) and thus an ROI analysis of your recruiting budget. This enables you to make data-driven decisions on how and where to use your budget in the future and expand your media mix (incl. social, display). With pay-per-performance models and our solution, you can react continuously and flexibly to supply and demand. With our Sourcing-as-a-Service offer, we optimize your recruiting and you can concentrate on strategic recruitment.

Do you have questions about optimizing your recruitment spend? Contact us and we will be happy to discuss your use case!

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