Did you hear? SEEK, the Australian job board giant, is moving from a subscription-based revenue model to variable – or surge – pricing.
Um…what’s that, you may ask. Well…it is lining up the price for a job ad with the value it represents to the employer at a given point in time. In other words – no fixed pricing, and instead, pricing dependent on what is delivered. You could call it, um, pay for performance.
This move is interesting for a number of reasons. First – if you didn’t know already – SEEK is big. It generates about $1B USD a year. Also, it operates not only in Australia and New Zealand, but in Southeast Asia, South America, and a number of other markets. And it’s been successful – thus far – at keeping Indeed at bay in the Australian market. But…as a publicly held company – and a near monopoly – there is a constant drumbeat to increase revenues – which, by the way, grows harder the bigger you get. Thus, variable pricing, which SEEK believes can drive up profitability significantly. The less you leave on the table, the more you make, in other words.
SEEK first mentioned their plans to move the Premium ads to surge pricing back in April. As they pointed out, there were challenges – both technical and contract-related.
The stock market liked SEEK’s move – shares moved up 16% during the three weeks after their April announcement. Yet the company continues to be somewhat vague about the details of how one of these ads are enhanced and valued. As Australian recruitment expert Ross Clennett pointed out, “As to the specifics, you’re out of luck if you want more than the vagaries of the FAQs.”
Apart from extracting more revenue from their customers, it appears that SEEK’s change is a response to Indeed and other pay for performance vendors. Unlike the capitulation by U.S. market leaders to Indeed, SEEK is determined to maintain its hold on Australia and New Zealand.
Will it work? Well, SEEK’s track record thus far is pretty impressive. I wouldn’t bet against them.[Want to get Job Board Doctor posts via email? Subscribe here.].