As Seen In The Wall Street Journal

Cash-Strapped Companies Save With Search Ads, Scale Back on Rival Media Like Job Boards and Newspapers

Companies have long used search-engine marketing to lure online consumers. Now they're looking to draw job hunters the same way, while scaling back on competing media such as job boards and newspapers.

In search-engine marketing, employers bid to place ads next to search results for certain keywords, like "accountant," or "nurse." The ads can be limited to users in specific ZIP codes. Advertisers pay search engines when a user clicks on their ad.

Last March, Baylor Health Care System, a large Dallas-based nonprofit, began purchasing keywords on Google, Yahoo and employment-related search engines SimplyHired.com and Indeed.com. The search-engine ads generated more applicants, at less cost, than the other recruiting methods, says Eileen Bouthillet, director of human resources communications.

In the first six months of the program, Ms. Bouthillet says, the search-engine ads delivered 5,250 applicants, at an average cost of $4. By contrast, Baylor paid an average of $30 for each of the 3,125 applicants who came via job boards, and $750 each for the 215 applicants who replied to a newspaper or magazine ad.

As a result, Ms. Bouthillet says Baylor has reduced spending on job boards and print ads. "Before we were throwing darts at a dart board trying to see what might stick," she says. "Now we have a very targeted strategy and a point of comparison so we can make wise decisions on where we spend our money."

For now, the impact of search-engine marketing on recruiting is muted by the recession, which has erased more than four million jobs. Recruitment advertising fell 22% last year, to $5 billion, according to Advanced Interactive Media Group LLC. Recruitment ads in newspapers fell 34%, and on the Web 5%, the firm says. The trend continued into January, when advertised vacancies online fell 23% compared with December, according to the Conference Board, a research group.

But search-engine marketing is gaining a foothold among those still hiring. TMP Worldwide Advertising & Communications LLC managed search-engine campaigns for more than 125 clients in 2008, up from 65 in 2007 and 20 in 2006. Davis Advertising Inc., a small agency in Bala Cynwyd, Pa., did the same for 41 clients in 2008 up from 17 in 2007.

United Parcel Service Inc. launched a search-marketing campaign last fall to recruit truck drivers for the winter holiday season. Search-engine users who entered phrases such as "seasonal jobs" or "part-time jobs" were likely to see an ad directing them to UPSjobs.com. From there, job hunters could review a list of openings at the delivery company, watch a video about working there and apply for positions.

UPS says it received more than 150,000 applications from the campaign, at an average cost 75% to 80% cheaper than print ads. "We're cutting newsprint wherever we can and trying to move more to online media," says Matthew Lavery, corporate work-force planning manager. "Google is outperforming other online media."

Search-engine marketing proved less effective for Bessire & Associates Inc., which hosts recruiting events for companies looking to hire sales professionals. "It was an utter waste of time," says Jason Bessire, president of the Charlotte, N.C., firm.

Mr. Bessire devoted about 30% of its promotion budget for one event last spring to search ads on keywords such as "sales" and "commissions," hoping to draw job hunters to its Web site who would then register for the event. But Mr. Bessire says fewer than 2% of attendees at the event said they had been directed by a search engine. "We were highly disappointed," he says.

Greg Sterling, Internet analyst at Opus Research in San Francisco, says search-engine marketing could be an "experiment" by cash-strapped employers during the recession. If the technique proves effective, though, "you could see it take hold."

If the strategy becomes more popular, Mr. Sterling notes, it will also become more expensive, as employers compete to bid up the price of keywords. That could make it less effective compared with other media. For now, though, the few companies using it "get in front of applicants faster and without competition in many cases."

Jim Townsend, principal, editorial director at Advanced Interactive Media, also is skeptical. He says roughly 100 U.S. hiring managers gave search-engine marketing mixed reviews in a recent survey. "It could be that they're not buying the right keywords or they don't fully understand how to make search-engine marketing work for them," he says.

Mr. Townsend adds that search-engine marketing, like many traditional advertising strategies, doesn't help employers identify quality talent. "It doesn't necessarily mean you're getting better fish, just more fish," he says.