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Advice for Employers and Recruiters

Which is better, CPA- or CPQA-based job ad pricing?

Anita Jobb AvatarAnita Jobb
November 14, 2023

There’s at least an evolution and perhaps revolution occurring in the world of job advertising: the migration from traditional-duration based pricing such as $X for a 30-day job posting to cost-per-click (CPC) to cost-per-application (CPA) and even to cost-per-quality-application (CPQA). Let’s focus on the latter two: CPA versus CPQA. Which is better? Well, the answer is, it depends.

The effectiveness of job posting advertising is often measured through various metrics. Among these, CPA and CPQA stand out as critical indicators. Both metrics provide valuable insights but differ significantly in their focus and implications for hiring strategies.

CPA-based job posting ad pricing

Cost-per-application (CPA) is a straightforward metric. It measures the cost incurred by an employer for each application received as a result of a specific job advertisement. In some cases, an employer or other advertiser will pay a fixed amount and will later look back to calculate their effective cost-per-application (eCPA). To calculate your eCPA, divide the total cost of the advertising campaign by the number of applications received. For example, if a campaign costs $1,000 and generates 100 applications, the CPA would be $10. Increasingly common are advertisers who agree upfront to pay a fixed amount per application with a budgetary cap. In these cases, the eCPA will always be the same as the CPA as the pricing is set in advance.

Whether you’re buying on an eCPA- or CPA-basis, the metric is particularly useful for gauging the initial effectiveness of a job advertisement in attracting candidates. It’s a quick way to assess whether an ad is performing well in terms of visibility and initial appeal. However, CPA has limitations. It does not account for the quality of the applications received. This is where cost-per-quality-application (CPQA) comes into play.

Delving into Cost Per Quality Application (CPQA)

CPQA takes the analysis a step further by evaluating the cost-effectiveness of a job advertisement in attracting not just any candidates, but those who are deemed ‘quality’ candidates based on specific criteria set by the employer. In this context, ‘quality’ is typically defined as candidates who progress from simply applying to being shortlisted for an interview or further stages in the hiring process.

To calculate your effective cost-per-quality-application (eCPQA), divide the total cost of the advertisement by the number of applications that were moved forward in the hiring process. For instance, if out of 100 applications, only 20 were deemed quality applications, and the campaign cost was $1,000, the CPQA would be $50. As you might have expected, if you agree in advance to pay a flat fee per quality application, your eCPQA will always be the same as your CPQA.

This metric provides a more nuanced understanding of a campaign’s effectiveness. It helps employers identify not just how many candidates are attracted, but how many of those candidates are potentially suitable for the role.

Contrasting CPA and CPQA

The fundamental difference between CPA and CPQA lies in what they measure. CPA is about quantity, providing a basic cost-effectiveness measure in terms of attracting applicants. On the other hand, CPQA focuses on the quality of those applicants, measuring how cost-effective the campaign is in attracting potentially suitable candidates.

Focus: CPA looks at the volume of applications, while CPQA zeroes in on the quality of those applications.

Insights for Employers: CPA can help in understanding the initial appeal and reach of a job advertisement. CPQA, however, provides deeper insights into how well the advertisement works in attracting suitable candidates.

Decision-Making: While CPA is useful for budgeting and gauging initial campaign success, CPQA is more critical for strategic decision-making. It helps employers refine their recruitment strategies to attract more suitable candidates.

Balancing CPA and CPQA in Recruitment Strategies

For an effective recruitment strategy, both CPA and CPQA should be considered. Focusing solely on CPA might lead to a high volume of applications but not necessarily quality candidates. Conversely, focusing only on CPQA might result in fewer applications, but with a higher proportion of suitable candidates.

The key is to find a balance. This can be achieved by:

Targeting the Right Audience: Tailoring job advertisements to appeal to the desired candidate profile can help in attracting quality applications.

Optimizing Job Descriptions: Clear, concise, and well-crafted job descriptions can filter out unqualified applicants early in the process.

Using the Right Platforms: Different job boards and other recruitment advertising platforms may yield different CPA and CPQA results. It’s important to choose the right platform based on the target audience and role requirements.

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