Cage Match: Targeted Emails vs Banner Ads

One of my greatest frustrations when helping clients solve their recruiting needs relates to how some use, or should I say misuse, banner ads. Those billboard type ads that at the top right corner of virtually every interior page of CollegeRecruiter.com and in similarly prominent locations on most web sites have been around almost since Al Gore invented the Internet. But do they work? Quite frankly, they’re usually a waste of the client’s money.

We rarely suggest or recommend that clients purchase banner advertising because they’re so ineffective for the vast majority of clients. When a client tells us that they’re interested in banner advertising, we try to ask them a series of detailed questions about why they’re interested in banner ads and how they plan to measure the results. If we’re 100 percent convinced that they understand that they are likely to see very few clicks and far fewer to perhaps no applications and therefore extremely unlikely to actually hire anyone, then we will feel comfortable that they understand that banner ads are only suitable for building the brand of the employer. Some of our clients use banner advertising for exactly that purpose and it makes sense for them. If the college students and recent graduates who use our site are not aware of the employer or don’t realize that the employer has certain attractive positions available, then a banner advertising campaign coupled with other media can make sense. But if the client is looking to the banners for clicks, applications, or hires then the client is making a mistake.
So what’s the best alternative? Usually targeted emails. On behalf of the client, we can deliver within two or three business days and sometimes even faster an plain text or graphical (HTML) email to thousands, tens of thousands, or even hundreds of thousands of highly targeted candidates. We can deliver an email to all of the 8.9 million college students and recent graduates in our double opt-in database or any portion thereof. We have up to 700 fields of data per candidate and can combine those in any way to select a highly targeted group of people. So we can deliver an email to African-American females who attend any of a dozen schools and reside in certain metro areas, who have a GPA between 3.0 and 4.0, who exhibit leadership skills by being active in campus sports and the Greek system, are majoring in accounting or finance, and who speak Spanish, French, Italian, or Swahili as a second language.
So why do targeted emails make less sense for employers who want to see a response rate? Let’s do the math. A typical banner ad campaign on CollegeRecruiter.com would call for us to deliver 100,000 banner ads in a month. We charge $8 per thousand impressions (CPM) for banner ads, so the cost for that campaign is $800. The employers typically see about 0.01 percent of the banners clicked on, so that’s about 10 clicks and therefore the cost per click is $80. Ouch.

Now let’s look at the typical performance for a targeted email campaign. A normal sized campaign is 100,000 emails although many are smaller or larger. For employment-related campaigns, we will typically see an open rate (how many are read) of about 15 percent and about 15 percent of those click through to the employer’s web site. So far fewer people will see the employer’s ad with an email campaign and therefore they’re hurt on the branding side, but far more people click through to the employer’s web site and therefore far more people will end up applying. Rather than seeing 10 clicks like with a typical banner ad campaign, the targeted email employer will see about 2,250 clicks. The cost for an email campaign to 100,000 highly targeted, pre-qualified candidates is $4,200 so the cost per click is $1.87.
When I talk with other job board owners at gatherings like the International Association of Employment Web Sites meetings or on the phone (some of our clients are large, general and niche job boards), they tell me that about 80 percent of their revenues come from the sale of traditional job board products such as job postings, resume searching, and banner advertising. With CollegeRecruiter.com, about 80 percent of our revenue comes from targeted emails, cell phone text messaging, and other such direct marketing products. We know from experience how to sell and deliver these products so that they are well received by both the candidates and the employers. And we know that they greatly outperform banner ads in almost every instance.