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Indeed kills its cost-per-application product

Steven Rothberg AvatarSteven Rothberg
December 7, 2023

Huge news from Indeed, the company that popularized performance-based pricing for job posting ads: effective December 18th, it will cease selling postings on a cost-per-application (CPA) basis.

In today’s “breaking news” episode of the Inside Job Boards and Recruitment Marketplaces Podcast, my Cohost, Peter M. Zollman of AIM Group (Marketplaces / Classifieds), and I were joined by Jeff Dickey-Chasins a/k/a The Job Board Doctor, for what proved to be a lively and perhaps even informative discussion about why Indeed reversed course and the ramifications for them, the industry, and other stakeholders.

The announcement by Indeed essentially rolls their pricing model for job postings back to what it was a year ago. Employers could pay per click with candidates applying either through an Indeed-hosted application page or through the employer’s career site, typically hosted by an applicant tracking system (ATS). If the candidate applied at the employer’s career site, Indeed referred to that as a “pay per started apply” (PPSA), which Jeff pointed out is really the same as what other job boards call a click.

At the end of the day, the news shocked many in the job board and recruitment marketing industries as Indeed had signaled as recently as September that it was very, very close to being very, very successful with its new CPA pricing model. Although some have speculated that it was eliminating its CPA product based on a large number of low-quality and even fraudulent applications generated with artificial intelligence (AI) products, Peter shared that Indeed went on the record with the AIM Group that the elimination of the product had nothing to do with that and instead, quite simply, due to the product being too complicated to buy for too many advertisers.

I find a lot of this to be quite interesting, including that College Recruiter has successfully delivered many, many CPA campaigns as far back as 2014. Due to increased demand from customers for CPA-based pricing, we began offering it to all customers on a much more formalized basis in July, found almost immediately that it wasn’t profitable, paused the product, built some tech to address the problems, relaunched it in August, and saw that by October it was already our largest product by revenue and profitability.

So why has College Recruiter been successful with a product that Indeed decided to kill? There are many possible reasons, but I think the most important are that our employer customers are enterprise-level and so tend to be more sophisticated and have better tools at their disposal than small- and medium-sized business (SMBs); we didn’t force CPA-based pricing on any customer and so those who preferred traditional, duration- or CPC-based pricing could still buy that way; and we didn’t implement a return policy under which the employer wouldn’t have to pay for applications they deemed to be of low quality as we felt that charging less per application and never charging for non-human clicks or applications was better for all involved.

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