McClatchy’s purchase is accelerating a philosophical shift in strategic inter-media alliances between publications and job boards. It is also intensifying competition among the Big Three job boards—Monster, CareerBuilder and Yahoo HotJobs—as they consider the role media alliances play in personalizing their brands, ex- panding into smaller markets and reaching new consumers.
Vying for media outlets could also be a way for the big boards to pre-emptively combat competition from their smaller brethren. Monster, for example, on October 18 partnered with the 286,000-circulation Akron Beacon Journal in Ohio to launch a recruitment site. Experts predict that the number of employment sites, including industry-specific niche sites and alumni-operated boards, will double to some 80,000 in the next three years. Securing competitive advantages will be one way for established job boards to keep from becoming dinosaurs. Some job boards are already reaching out to other media.
"It allows us to provide more comprehensive services to both job seekers and recruiters," says Paul Forster, CEO and co-founder of Indeed. The job search engine agreed to sell a $5 million minority stake to the New York Times Co. in August 2005 and now powers job search capabilities for several of its properties, including NYTimes.com, Boston.com and About.com.
Wooing partners from the publishing industry won’t come easy and could depend on several factors, including the kind of services a job board offers, as well as its size, the nature of the audience and its ease of use, says John Zappe, principal and analyst at Classified Intelligence, a consultancy in Altamonte Springs, Florida.
Branding also plays a role. Name value helped Monster beat out its peers in July when it displaced CareerBuilder as the primary online recruitment partner for Philadelphia Media Holdings, which acquired The Philadelphia Inquirer, the Philadelphia Daily News and Philly.com from McClatchy earlier this year, says Brian Tierney, chairman and CEO of Philadelphia Media Holdings. By August, Philadelphia Media Holdings and Monster had launched philly.com/monster, a co-branded job search and recruitment portal.
"In terms of absolute volume, the Monster and Philadelphia Media Holdings agreement is a mosquito in the room," Zappe says. "But it does present a model for others considering comparable moves, and it has gotten publishers to talk about the transaction."
In other words, the Monster co-branding deals could open the floodgates to other inter-media alliances and let job boards personalize their brands in smaller communities that had previously been difficult to crack.
The best defense
CareerBuilder, for its part, does not appear to be taking the Monster deal lightly. The company, founded in 1995, is owned by a troika of media companies, including Gannett and the Tribune Co. With its acquisition of third owner Knight Ridder, McClatchy gained a 15 percent stake in the company.
Days after Philadelphia Media Holdings and Monster announced they were joining forces, CareerBuilder launched a campaign proclaiming that it had made history by taking a dominant role in the job board industry.
"In terms of absolute volume, the Monster and Philadelphia Media Holdings agreement is a mosquito in the room. But it does present a model for others considering comparable moves, and it has gotten publishers to talk about the transition."
--John Zappe, Classified Intelligence
The company, which cites several sources to support its claim of leadership—more than 1.9 million job listings and 23 million unique visitors per month—also announced it generated $172 million in market revenue domestically during the second quarter. Monster, by comparison, posted $163 million for its North American operations during the same time. Job listings for Monster number about 1.1 million, according to Alexa.com.
CareerBuilder took out full-page ads in The Wall Street Journal and USA Today to trumpet the milestone. "We didn’t invent the industry. But in five years, we’ve taken it over," read the ad, which was signed by CareerBuilder CEO Matt Ferguson. Job board experts hinted it was a move to blunt the impact of Monster’s deal with Philadelphia Media.
Not so, says Richard Castellini, vice president of consumer marketing at CareerBuilder in Chicago. The Monster and CareerBuilder announcements coincided because Monster’s quarterly report was made public around that time, and it was only then that CareerBuilder could verify its revenues versus those of its competitors, Castellini says.
Any defensive tactic CareerBuilder uses to fend off rivals is understandable, considering what’s at stake. The company’s built-in relationship with 190 newspapers is a strategic treasure trove, particularly in today’s market, where mid-- size and smaller companies are becoming increasingly important clients to job boards. These companies, which don’t have a national presence or the budget to pay for relocation costs of job candidates, like the focused regional coverage newspapers offer.
There is a multitude of accounts up for grabs among companies with 2,000 to 5,000 employees, Zappe explains. Until recently, the goal was garnering as many large clients as possible, leaving other segments virtually untapped.
"There is a finite number of companies in the Fortune 1,000, the Fortune 500 and the Fortune 100," Zappe says. "Many of those accounts have been mopped up already."
Peter Weddle, CEO of Weddle’s, a research firm and consultancy based in Stamford, Connecticut, believes opportunities still abound among big clients, though their needs are evolving. But he concedes that the demand for personalized, local recruiting tools will escalate because companies are casting wider nets.
"Big companies have extended their reach to other tools, such as niche and diversity job boards, to enhance their recruiting efforts," he says. Alliances with newspapers can give the big job boards a niche feel at the small-market level.
Job boards could be in luck in their quest to forge inter-media alliances. The new owners of the former Knight Ridder papers sold off by McClatchy are flirting with job boards other than their legacy partner, CareerBuilder.
Jody Lodovic, president of Media-News Group, which this year purchased the San Jose Mercury News and the Contra Costa Times from McClatchy, has acknowledged the company is exploring an online classified advertisement relationship with Yahoo HotJobs.
Staying on top of the game
The shake-up in alliances could spur the Big Three to consider further modification of their traditional business models. Monster had focused on building brand supremacy, while HotJobs leveraged its relationship with parent company Yahoo, which purchased the company in 2002, to drum up business. And CareerBuilder capitalized on its ties to the newspaper industry to provide job listings.
But now CareerBuilder has gone beyond newspapers by partnering with AOL and MSN. The company wants to grow overseas, Castellini says. CareerBuilder has established a presence in Canada, the U.K. and, most recently, India—last month it formed an alliance with Naukri.com, the country’s largest career Web site.
Castellini says that while CareerBuilder is tracking the results of Monster’s deal in Philadelphia, its network of nearly 200 newspapers gives it a dominant position.
Newspapers are wise to team with
job boards, rather than trying to beat them or ignore them. "I know of several publishers that are very interested in this model."
-- Brian Tierney,
Philadelphia Media Holdings
Some experts believe newspapers could benefit by pitting the big boards against one another to broker better deals. Such maneuvers will have their limitations, analysts say, because many cash-strapped newspapers will depend on the expertise of job boards to enhance their online classified recruitment sites and tap into a much-needed new source of revenue.
Within the print classified segment, advertising for recruitment totaled $1.2 billion in the second quarter of this year, off by 6.5 percent from the same period in 2005, according to John Kimball, chief marketing officer and senior vice president at the Newspaper Association of America, an industry organization in Vienna, Virginia. It’s a dramatic fall from the historic high of $8.7 billion in 2000.
By contrast, advertising for newspaper Web sites increased by 33.2 percent to $667 million in the second quarter. The shift to online advertising is expected to continue. Last year, some $1.75 billion poured into online recruitment classifieds, according to Weddle.
In the face of those numbers, newspapers are wise to team with job boards, rather than trying to beat them or ignore them. "I know of several publishers that are very interested in this model," Tierney says.
If inter-media alliances take off on a mass scale, recruiters and job seekers will be the ultimate benefactors, since experts believe they will receive services and information relevant to their needs. Geographic focus will give recruiters access to local talent that doesn’t want the hassle of relocating for a job. Job seekers, meanwhile, can benefit by learning about the specific job opportunities in their local communities.
In the short term, competition in the job board industry will intensify as rivals look for ways to differentiate themselves and create an edge. The alliance between Monster and Philadelphia Media Holdings raised the stakes to a new level, Zappe says.
"There is a new universe out there," he says. "Everything and anything is up for grabs."
Workforce Management, October 9, 2006, p. 1, 31-33 -- Subscribe Now!