Recruitment Ad Startup Closes, Lamenting HR’s Status

Aug 17, 2009
This article is part of a series called News & Trends.

Snaptalent, a company whose name may be familiar to anyone who attended the fall ERE Expo, has shut down, leaving behind a poignant note about the difficulty of making inroads to the recruitment market generally, but especially in the economic conditions of today.

Snaptalent made its ERE debut as one of four companies to showcase at our Startup Panel. Already struggling then as the recession took hold, Snaptalent’s CEO Sumon Sadhu described the company as an Adsense-like ad network for recruiters that positioned ads on contextually related content pages of its participating publishers.

It was a well-received concept that as an exclusive recruitment ad program had no direct counterparts. However, the job listings aggregators — SimplyHired and Indeed — were already doing something similar for their PPC job postings. Because of their reach, they were able to deliver volume. Plus PPC campaigns are attractive to budget-minded recruiters since you pay only when an interested prospect clicks on the posting.

On the Snaptalent site, the farewell message acknowledges that despite the accolades the business model “ended up being economically unviable as a business. Primarily because the number of candidate leads generated per impression wasn’t able to satisfy employers to keep buying and therefore for publishers to keep getting paid.”

Within a few months, Snaptalent had abandoned the ad network concept in favor of a college recruiting platform. It was introduced in the spring — too late, even in a good year, to interest many corporate recruiters. And 2009 is anything but a good year, as the Snaptalent team admits: “Market timing couldn’t have been worse … most calls to potential customers indicated that they wouldn’t be willing to spend or focus on this area for at least another year.”

The note concludes with a lament about the HR profession as a whole:

“It’s (recruiting) a large market ($10B/year spend), with rich customers, and poor innovation. It sounds like an entrepreneur’s dream. The truth is that there are barriers to adoption of newer technologies which come down to the position of HR in an organization. Since HR isn’t directly revenue-generative, HR decision makers aren’t as empowered to drive change required by revenue generative functions like marketing or sales.”

“Recruitment spend is bloated, so as the cost of transmitting information to connect companies and candidates comes down, the trend is for companies to use free tools which help amplify that spread. The companies that will win in the recruitment space therefore are all working on solutions which take away from job advertising spending; search engine optimization, social networking, referral hiring, improving social media presence.”

The company’s final message says it is returning the majority of the money investors gave it.

This article is part of a series called News & Trends.
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