Differences between CPA- and CPQA-based pricing for job posting ads

Employers have been advertising their jobs for several hundred years. Just in the last decade, a significant amount of that budget has shifted from traditional, duration-based pricing such as $X for a 30 day posting to performance-based pricing.

There are a number of different performance-based pricing models. The two most popular are cost-per-click (CPC) and cost-per-application (CPA). Employers need to be cautious about these terms as one sourcing partner like a job board or other media site might define a “click” or “application” one way while another might very reasonably define those quite differently.

Let’s first talk about cost-per-click (CPC). One job board might charge the advertiser for a click when the candidate searches, gets a list of potential matches, and clicks on one of them to read the job posting ad. Other sites, including College Recruiter, take a more advertiser-friendly approach by regarding that as a “view”. Most, but far from all, sites regard the “click” as occurring when the candidate goes to the page chosen by the advertiser for where the candidate will start to apply to the job. Generally, that’s the job posting ad on the employer’s applicant tracking system (ATS) or other such career page. In some cases, however, the “click” is when the candidate goes to the application page hosted by the job board, as that’s the process selected by the advertiser.

Regarding cost-per-application (CPA), the situation is quite similar. Some sites will charge employers and other advertisers for candidates who see the posting on the job board, click the apply to “start” the application process, and then go to the employer’s landing page, such as the posting on the ATS. These sites often refer to these as “apply starts”, but not always. Sometimes, they just refer to them as applications and will only admit exactly how little engagement there is if pressed. College Recruiter, and many other sites, charge for applications when the candidate has completed the application. Generally, the advertiser has a tracking pixel or some other method set up on their site that automatically sends to us a signal that the click we just sent converted into an application. With that data, we can tell which kinds of candidates we’re sending are converting well into applications, and so we’re going to automatically send more of those kinds of candidates and fewer of the kinds of candidates who don’t convert well into applications. Pretty quickly, it means that a higher percentage of the clicks convert into applications, and that creates a better experience for the candidate and recruiter.

Another pricing option is rarely available: cost-per-quality-application (CPQA). There are several primary reasons. One is that few advertisers can even agree internally what makes for a “quality” applicant. An employer might have dozens of recruiters, each managing dozens of requisitions. Each recruiter might have a different definition for what makes for a “quality” applicant, and that can even vary role-to-role. What seems to be emerging is that when the employer moves the candidate forward in the hiring process, such as offering to them an interview, that’s a good, objective measure of quality. If the candidate wasn’t of interest to the employer, they would be rejected and not moved forward. Conversely, if they are moved forward, that means that they must be of interest to the employer and, therefore, meet at least a minimal level of quality.

When employers choose to pay for job postings, they often face the decision between traditional, duration-, CPC-, CPA, and maybe even CPQA-based pricing. Each approach has its distinct features and implications for the recruitment process. Perhaps the least understood are those related to CPA versus CPQA-based pricing.

1. Cost-Per-Application (CPA):
   • Volume Focus: CPA models prioritize quantity. Employers pay based on the number of applications received, regardless of their quality.
   • Budget Predictability: This model offers clear budget predictability. Employers know the cost per application and can estimate total costs based on expected application volumes.
   • Higher Applicant Numbers: Employers might receive a large number of applications, which can be advantageous for roles where many applicants are desired or for building a talent pool.
   • Potential for Lower Quality: There’s a risk of attracting a high volume of less-qualified candidates, which can increase the workload for HR teams in sorting and screening applications.
   • Suitable for Broad Roles: CPA is often preferred for roles where specific qualifications are less critical, or the focus is on attracting a large number of candidates.
2. Cost-Per-Quality-Application (CPQA):
   • Quality Focus: CPQA models emphasize the quality of applicants. Employers pay for applications that meet predefined criteria, ensuring a better match for the job requirements.
   • Efficiency in Screening: This approach saves time and resources in the recruitment process, as the employer receives applications that are already vetted for relevance and quality.
   • Cost Variability: The cost can be less predictable, as it depends on the number of quality applications received. This might be higher or lower than anticipated.
   • Lower Volume, Higher Relevance: While the number of applications may be lower than with CPA, the relevance and potential fit of candidates are usually higher.
   • Ideal for Specialized Roles: CPQA is particularly beneficial for specialized or senior roles where specific skills and experience are crucial.