How to determine what CPC to pay for job posting ads

Cost-per-click (CPC) is performance-based advertising. In a nutshell, the advertiser pays the media publisher a fee every time an individual sees the ad and clicks on it to go to the advertiser’s landing page. In the employment world, that typically translates into an employer posting a job pays College Recruiter or another job board every time a candidate sees the job posting ad and clicks to go to the employer’s site to, hopefully, apply.

According to Wikipedia, “Cost-per-click (CPC) is calculated by dividing the advertising cost by the number of clicks generated by an advertisement. The basic formula is: Cost-per-click ($) = Advertising cost ($) / Ads clicked (#) There are two primary models for determining pay-per-click: flat-rate and bid-based.” A flat-rate, CPC campaign means that the advertiser will pay the same CPC for every click for every ad. A bid-based, CPC campaign means that the advertiser will pay a different CPC for clicks for different ads. For example, an employer might pay $1.00 when a candidate reads an ad for an engineering role and click but $0.60 when candidates read an ad for a customer service role and click.

Just as Google did not invent cost-per-click (CPC), online advertising, neither did Indeed invent CPC job postings. But Google popularized CPC, online advertising and Indeed popularized CPC job postings. Starting about five years ago, College Recruiter invested heavily in our product, process, and people and became, probably, the first niche job board in the world to successfully migrate its employer customers from traditional, duration- to performance based pricing for job posting ads. What we’ve learned along the way has definitely contributed to my (shrinking) hairline but also some good things.

To a math and science geek like me, numbers can speak volumes. One of our discoveries when we began the migration was that the number of candidates who view (read) a job posting ad is largely determined by how high it appears on the search results page. And the higher the ad appeared in the search results page, the more candidates we would send to our employer customer’s website to, hopefully, apply. It turns out that this is a truism across all search engines, whether the search engine is Google, Bing, Indeed, or College Recruiter. About 1/3 of those who run a search will click on the first result, about 1/3 of the remainder will click on the second result, about 1/3 of the remainder will click on the third result, etc. So, if your ad appears on the first page of the search results, great, but if it appears in the tenth position you’ll only get a small fraction of the candidates than if it appeared in the top position.

Let’s look at the math. If 1,000 candidates run a search and 1/3 click on the first job, that employer will capture 333 candidates, meaning those candidates will read that employer’s ad. The employer with the ad in the second position will get 222 candidates. The employer with the ad in the third position will get 148 candidates. So, before you’re at even the fourth result, you’re already getting half of the results. By the time you get to the 10th ad, you’re getting only 12 candidates. That means that the employer with the ad in the first position will get almost 28 times the response rate that the employer gets whose ad is in the 10th position. Yeah, quite the drop-off.

So, how do you get your job to rank highly? Well, that’s going to vary site-to-site. With College Recruiter, we only display jobs which are relevant to the keywords and location entered by the candidate. In other words, if you’re searching for a nurse role in San Antonio, we’re never going to show you a truck driving job in Phoenix. Other sites do if that trucking company pays a high enough CPC. We don’t as those clicks rarely result in candidates being hired, so that’s bad both for the candidate and the employer.

You need to put yourself in the shoes of the candidate. What are the keywords they would likely use to find your role given that they probably know nothing about your organization? They’re certainly not going to type in your company name nor some internal jargon you might use to describe that role. So, don’t post a job for an “account executive” if you’re hiring sales representatives. Instead, use the job title, Sales Representative.

If your job matches well for the candidate’s keywords and location, then CPC comes into play. Everything else being equal, we’re going to rank the job with the higher CPC higher in the search results. Why? Because the employer who is able and willing to pay more is more likely to hire the candidates we send to them, and that’s good both for the employer and candidate.

If you need to hire one person, a CPC of $0.50 or $0.75 might be fine. That’s largely dependent on the kind of role and location, as there’s a huge difference in what makes CPCs competitive in different occupational fields and geographic locations. But if you need to hire five, 50, or 500 people into the same role, you’re going to need five, 50, or 500 times the applicant flow. And that’s where your rank on the search results page matters a LOT. If your ad is only seen by 12 of 1,000 people running that search, good luck getting to even five hires as you’re going to need a lot of luck. But if you want to hire 50 people and 333 people a day are seeing your posting, you’re quite likely to get the applicant flow that you need, and that’s a good thing for you, the candidate, and College Recruiter.