About 150 years ago, the brilliant and successful merchant John Wanamaker said, “Half of my advertising budget is wasted; I just don’t know which half.” John was a visionary who invented things we take for granted today like the price tag and the “money-back guarantee.”
John noticed that at least half of the ads he bought appeared in front of the wrong audience. And for 140 years that was what marketers had to live with: Pet food ads were displayed to people with no pets and car insurance ads appeared in front of people who didn’t have a vehicle.
There are many similarities between marketing and recruiting, and if John were with us today as a recruiter or head of talent, he’d probably say, “Over 90% of the money I spend on recruiting is wasted; the trouble is I don’t know which.”
CPC is at the heart of the problem.
Our industry currently runs on the cost per click (CPC) business model. The problem is that these pricing models have no notion of quality or fit. When you pay for clicks, that’s what you get—tons and tons of clicks, with no accounting for their quality.
In a typical recruiting marketing campaign, if you spend $100 at $1 CPC, you get 100 clicks. From those 100 clicks, 20 people apply. You spend an hour reviewing those applicants just to find 4 or 5 who are qualified. In this scenario, employers receive hundreds of unqualified candidates, spend substantial time reviewing them, and pay for each one. As a result, employers are only willing to spend a small amount per click.
Introducing the programmatic approach.
The word “programmatic” gets thrown around a lot, but what does it really mean? In a programmatic system, a machine is programmed to make decisions that maximize some objective that was set by a human. And because machines can process more data—and make decisions more quickly—than people, they often can do a much better job, at a much lower cost.
In advertising, programmatic systems use huge quantities of data about individual users’ demographics and preferences to decide automatically which ads to show to which users in just a few milliseconds. As an advertiser, you can place your ad only in front of relevant people.
Because systems like these provide superior results to human-optimized campaigns, the programmatic approach took advertising by storm. It grew from zero to $30B in less than 10 years, transforming an industry that was based on relationships to one that is very efficient and data driven.
What programmatic means for recruiting.
In the next 10 years, programmatic is going to transform recruiting. It will make qualified talent available to you, anytime, on demand, while cutting weeks from the hiring process. And it will make the job search experience more human and rewarding, allowing candidates to quickly connect with interested potential employers.
Qualifications are the often ignored part of the job description, but they’re also objective and can be assessed accurately and automatically with artificial intelligence. Using qualifications as the language, I can set actions and prices, guaranteeing that for every position I get only qualified candidates at prices I set in advance. This might sound complicated and futuristic, but it’s already happening today. Let’s see it in action.
Meet Megan. Megan is looking for a new job. She’s visiting her favorite job site and uploading her résumé. The site, after a simple integration, is using a programmatic technology partner to extract the merits profile from Megan’s résumé. The profile includes detailed information about her work experience, industry, hard skills, soft skills, and education. The profile is then sent to employers with matching requirements. The employers, using a simple tool, set the bid for this type of candidate. Megan is then presented with open positions from the most interested companies. She selects the companies she’s interested in, and the employers receive an “Interested and Qualified” candidate.
It’s only the beginning.
We are still in the early days of the programmatic recruiting revolution. This is an exciting time to be a recruiter. We’re about to see a major shift. The next stage of programmatic recruiters will use smart tools to design requirements and find the perfect candidates. They will make a real human connection with high-caliber candidates rather than spending time on those who are irrelevant and unqualified—and this approach will have a tangible impact on their companies.
So what are you waiting for?
Leave the CPC inefficiencies behind and join the programmatic revolution. You won’t miss the piles of unqualified résumés—I promise.