Job Advertising Networks Generally Fail

It's now been about 3 years since we decided to start Personforce. When we first started, we had some idea about being a "Google Adsense for Jobs" or a "Ad Network For Jobs". After talking to potential customers, we dismissed the idea. Every few years though, a company tries to setup up this sort of ad network. There are a couple of reasons job ad networks are economically unsound ideas:

1. It's unlikely a job advertisement is the most lucrative use of ad space for a publisher. In fact, it's impossible.

2. Advertising to "passive job seekers" is a kind way of saying "advertising to people who have no interest in what you are advertising."

3. Cost per applications are very very expensive when you are advertising to people who have no "purchase intent" for what you are selling (your job opening).

4. An easier way to target passive job seekers is just to find their profiles on LinkedIn and message them.

These economic realities generally make it difficult to pull off an ad network for jobs.

Using Adsense to test your business model

There has been a lot written how entrepreneurs can use Google Adwords to verify whether customer demand exists for their products. Even before you have a product built, you can write a text ad and pay to have it displayed next to search results. If people click on your ad at a solid clip, you have a good sense whether customers are interested in what you are offering.

Another interesting tool is to use Adsense to test your business model. You can use Adsense to answer a simple but important questions - is there money to be made in what I am doing? All too often, entrepreneurs start a social network, blog, or site where there is literally no way to make money. This is a little diagnostic to help avoiding that. Here goes:

Put Adsense on your site. Observe the eCPM. If the CPM is high (say greater than 5 CPM) this is a good sign. If you have low CPM (say less than .5 CPM) this is a bad sign.

The eCPM of your site tells you two important things. First, are you in an industry where there is money to be made. You might not understand yet how to make that money, but someone out there is willing pay for traffic and therefore they know how to make money.

Second, the eCPM tells you whether your vistors have "purchase intent" for something. If they are coming to your site to read an article, message their friends, or write a post, they probably don't have purchase intent for anything and will exhibit a low eCPM. If they are looking for real estate, browsing car prices, or looking at electronics reviews, they will tend to have an higher eCPM.

If you are getting a very low eCPM, I'd encourage you to think very critically about the industry you are getting into and your prospects for making money. Your site could become massively popular, but your business could still be a failure. Your business model will feel like you are squeezing blood from a stone.

In short, you can use Adsense to determine industry profitability and whether you are attracting visitors that might want open their wallets. This does not mean you should use Adsense as your primary business model. Making decent money from 3rd party advertising (even at a high CPMs) requires a level of traffic that most sites will never achieve. However, if you are achieving a strong eCPM, there is a good chance eventually you'll figure out how to make money.

Adsense can undermine your message

I put Adsense on this blog a couple of months ago to better understand how online advertising and monetization of content works. It's still a bit of a mystery to me if/why people click on advertisements so I thought perhaps I could learn by minor experimentation. The downside of using these ads are it sullies the purity of your site while simultaneously not making you very much money (based on the traffic of Silicon MBA anyways).

One weird thing I've noticed so far is that adsense can seriously undermine the message of your post. Yesterday, I wrote about critizing FreeCreditReport.com for engaging in a predatory business model. Today, I open up the post and my site is full of advertisements for FreeCreditReport.com and other online credit led generation services! My message about criticizing it's business model is a little undermined, don't you think?

I imagine this happens a lot. If you write a negative review about some company or practice and then ads endorsing that company or practice start showing up. I wonder how many vegans write blogs financed by ads from Omaha steaks?

Perhaps as Google Adsense gets smarter and understands the semantic meaning of the text, this sort of mistargeting won't take place.