“CPA is dead!” “Long live CPA!” Depending on whom you talk to in the recruitment advertising world, cost per application (CPA) is an irrelevant measure of advertising efficacy … or extremely important. The reality is, CPA is somewhere in between; it’s a useful metric that is best used with other indicators to get a full picture of cost per hire (CPH) – a broader measure that shows how effective your recruitment advertising really is. In this post I’ll talk about CPA, CPH, how to measure them objectively, and these metrics’ value in guiding your recruitment advertising spend.
CPA: A throwback that’s endured
When online talent sites first came to dominate recruitment advertising in the late 1990s, CPA was a key metric used to tout the volume of candidates their property attracted. The math is simple; recruitment teams run advertising campaigns across multiple talent sites to source candidates, tracking and measuring their performance based on the number of applications an ad receives. What if an ad attracts a large number of applicants at a low cost, but few of these applicants convert into hires? While the CPA is low, the recruiter ends up with a huge CPH!
With time, the industry focus has shifted from tracking applications to tracking hires. Lack of visibility across the recruitment advertising funnel – from clicks all the way to onboarding – makes it difficult to understand which talent sources deliver the most hires at the lowest cost. Relying too much on CPA makes it easy to overspend on talent sourcing channels that deliver a higher volume of clicks and applications, even if the applications don’t turn into a good number of hires.
A soupful of ingredients
The upshot is that the ability to track campaign performance and costs for all your recruitment media – from click to hire – in one place, is critical. Tracking efficacy solely by CPA is definitely dead; down-the-funnel metrics awareness is essential.
As I like to think about it, CPA is one ingredient in the recruiting soup, not the soup itself. For most recruiting organizations, there are three other basic ingredients that matter the most:
- Hire metrics: In a competitive and tense labor market, the talent source that delivers the hire first, wins. The cost to hire also plays an important role, as every customer has some level of cost constraints either defined by the corporate budgeting goals, or, in the case of staffing firms, the margin goals they set on each hire.
- Relevance of applications: Applicants can’t get hired if they don’t have relevant experience. For example, for a registered nurse job vacancy, a candidate already working as a registered nurse would be the most relevant, as opposed to someone working as a help associate at a senior living center. Application frauds also bring down the percentage of relevant applications.
- Source identification and strategy: Identifying the actual source of applications is an important data point for advertisers. At times, an application tracking system (ATS) may not be able to provide the required information, making source attribution difficult.
Why adopt down-the-funnel metrics tracking?
- View end-to-end campaign performance and cost data, from click to hire, in a single dashboard.
- Report on hire and other downstream funnel metrics such as the number of hires,
CPH, apply-to-hire conversion (ATH), time to hire, and more.
- Get complete attribution details to understand which sources deliver the best number of hires, time to hires, quality of applicants and other related metrics.
Optimize recruitment advertising campaigns using intelligence gained from down-the-funnel metrics.
Rely on an objective source
CPA data has traditionally been provided by talent source sites – another compelling reason to look beyond this simple metric. Ideally, CPA is just one indicator, incorporated into a high-performance programmatic advertising dashboard and analytic engine from a third-party provider, aggregating and analyzing data from across many talent sourcing channels.
In this way, recruiters can gain comprehensive and unbiased insight into how dozens – or even hundreds – of talent sourcing sites stack up across job types and industries. By offering both a big-picture strategic overview and granular drill-down analysis, you can finally see and understand the metrics that matter most to your organization.
Request a demo today to learn about Joveo’s talent source-agnostic recruiting solutions. And follow us on Twitter and LinkedIn, where we’re always working to help you get the most out of your recruitment advertising.