Heat On Seek: Disruptor becomes the disrupted

Heat On Seek: Disruptor becomes the disrupted

This story was originally published by

SHARE
THIS


What best describes you?

Twenty years after it disrupted the newspaper game online, recruitment specialist Seek now finds itself having to bend its model to the emerging global distribution behemoth, LinkedIn, and a few other nimble start ups like The Search Party.

For the first time the company will charge its recruitment industry clients to access its databases via its Talent Search system, according to a financial analytst report.In the report by Morgans, obtained by Which-50 off the back of the usual truck, analyst Ivor Ries notes, SEEK managing director Australia Mr Joe Powell yesterday confirmed that the company has commenced negotiations with major recruitment firms on charging for the ability to access candidates via the Talent Search system. While clients would be granted credits for the volume of current business, any consumption of candidate data and access above a set data limit would be subject to charging.

Some description

The report estimates the size of the recruitment placement fees market at $4 billion and suggests the industry will have to cop five to eight percent of that pool being directed to the cost of database access in future.Ries is bullish in Seek’s move, buying the company’s spin that the decision to pull forward the new model is a measure of its strength and acceptance by the recruitment sector.

Seek’s approach looks more like a nod to the inevitable, than a significant innovation. Quite apart from LinkedIn, a new generation of startups is already delivering new layers of service based on analytics. The Search Party for instance has organised with  recruitment firms to pool cv data into a single database with what is claims is significantly more depth than a typical Seek offering.

Then they apply their ‘data algorithm magic’ to match a clients search to its needs with what they claim is significantly more accuracy.  They claim the overall service is cheaper, faster and more efficient for clients and provides the recruitment firms signed up with a distinct market edge over competitors.

Seek’s moment alone in the sun following the decline of News and Fairfax in the 90s and noughties as tier one recruitment channel is long past. LinkedIn has led the charge on reseting the rules around recruitment in two important ways.  Firstly for many companies LinkedIn isn’t necessarily a better way to advertise – but rather it has removed the need to advertise altogether, or at least mitigated against it as anything but a last resort, especially in senior white collar jobs.

And just as importantly LinkedIn has reframed the recruitment industry game through the provision of new subscription based services levels of which database access is just one component.

News and Fairfax bore the brunt of the first change, and Seek, the market leader for online jobs down under must now respond to the second.

Seek has a long track record of success and unlike the companies it usurped, it has a native understanding of what disruption looks like, and the chaos it can unleash on slow moving incumbents.

One problem however – just like local banks going up against tech giants in the transaction space, or retailers battling Amazon and Alibaba – is the tech stack. In the case of LinkedIn it will be battling a global technology superpower and may will struggle to match the levels of investment in that stack. It will have to find a new way to respond. In the case of the smaller innovative start ups like The Search Party, they are facing a model which competes in data matching, pricing and agility.

And while Linkedin’s  and The Search Party’s users are permanent and highly engaged, that’s not a claim a job’s board can credibly make. In his report, Ries writes, “The importance of a successful launch of the Talent Search database product – sometimes dubbed SEEK 2.0 – cannot be underestimated. The market for job advertising is limited and job ads only result in approximately 25-30% of job placements. Only by penetrating the market for candidate data can SEEK grow its domestic recruitment business to provide a larger share of successful job placements, and thus the value created.”

He cautions however that some cannibalisation is inevitable. “Every job placement made via the database means that no job is advertised and SEEK loses revenues. Therefore it is reasonable to expect that the gains in revenues projected from the database will result in some erosion in advertising revenues.”

Morgans estmates Seek will deliver Ebitda of $371 million this year. Interestingly, Seek this week announced a major management restructure.

According to CEO Andrew Bassett, the new executive team reflects the continued expansion and increased complexity of the business. He said it also involved recognition of strong performance by everyone who had been given new or expanded roles. Ben Hutt, Founder of the Search Party will be speaking at Daze of Disruption in May.

Secure  your ticket to Australia’s best digital transformation forum. Use the AND1 promo code for your B&T reader discount.

 

Please login with linkedin to comment

Latest News

The Advertising ID Consortium Welcomes New Platform Partners
  • Advertising

The Advertising ID Consortium Welcomes New Platform Partners

The Advertising ID Consortium – the open identity solution for the digital advertising ecosystem – has announced new platform partners. Since the Consortium’s announcement in May 2017, the founding members have established a governance framework and product specification that includes an open and standardised cookie and accessible people-based identifiers, delivered in a secure, privacy conscious […]

Marketing Melodies Partners With Spotify-Backed Soundtrack Your Brand
  • Marketing

Marketing Melodies Partners With Spotify-Backed Soundtrack Your Brand

Australian in-store music provider Marketing Melodies has announced an exclusive reseller agreement with Spotify-backed Soundtrack Your Brand for the Australia and New Zealand markets. Founded in Sweden in 2013, Soundtrack Your Brand was developed to kill bad background music. Its flagship solution, Soundtrack Business, is a music streaming platform licensed for commercial and public spaces. The […]

Social Garden Becomes First Bronze Snapchat Certified Partner In Australia
  • Advertising
  • Marketing

Social Garden Becomes First Bronze Snapchat Certified Partner In Australia

Customer acquisition firm Social Garden has become the first business in Australia to achieve Bronze status on Snapchat. Among the new benefits Social Garden will receive as a result of its Bronze status is access to beta versions of Snapchat data tools, such as the Snapchat Conversion Pixel, as well as being among the first […]

Hypetap Appoints Nuffnang’s Chris Morfis As GM
  • Marketing

Hypetap Appoints Nuffnang’s Chris Morfis As GM

Influencer marketing player Hypetap has made its second senior hire in less than a month, appointing Chris Morfis as the company’s general manager. Joining from influencer marketing provider Nuffnang Australia, Morfis will guide Hypetap’s growing team, providing strategic direction to accelerate the company’s growth, as well as leading operations and managing relationships with key partners. Morfis’ appointment will […]

On Air sign in a studio broadcasting via radio, podcast or wireless transmission.
  • Media

ARN Announces Departure Of Content Director & Radio Veteran

Australian Radio Network (ARN) has announced that Charlie Fox, content Director for WSFM and The Edge, and WSFM morning announcer Ron E Sparks, have departed. Fox has been with ARN since 2005, and Sparks joined WSFM in 2002. ARN national content director Duncan Campbell said the departure of Fox and Sparks are part of the […]

OMD Announces New MD For Melbourne
  • Media

OMD Announces New MD For Melbourne

OMD unveils new Melbourne MD, and it certainly wasn't among any of B&T's picks. Not that we were picking, mind you.

Sydney Festival Chooses Brightcove To Enhance Online Video Content
  • Media

Sydney Festival Chooses Brightcove To Enhance Online Video Content

Video cloud service Brightcove has announced that Sydney Festival has selected the platform to improve its user experience through online video content. Brightcove will do so by removing third-party branding and pre-roll ads, as well as adding autoplay functionality, ahead of the event in January. Leveraging the Brightcove video platform to host and publish video […]

Does Your Christmas Marketing Suck?
  • Opinion

Does Your Christmas Marketing Suck?

Remember the old Palmolive soap ad that asked, "Don't wait to be told"? This is sort of similar, albeit sans any suds.

Opinion

by Peter Harris

Peter Harris
Queensland Anti-Porn Crusaders Cop Ad Ban
  • Campaigns

Queensland Anti-Porn Crusaders Cop Ad Ban

We have a strident anti-pornography policy at B&T. Earphones must be worn at all times and strictly no little people.

by B&T Magazine

B&T Magazine
Nature’s Way Celebrates Big Things Little People Do In UCG Videos Via Wavemaker & Storyful
  • Advertising
  • Campaigns
  • Marketing

Nature’s Way Celebrates Big Things Little People Do In UCG Videos Via Wavemaker & Storyful

Health and wellbeing company Nature’s Way is celebrating the achievements of kids in a series of relatable and entertaining online videos that tug at the heart strings of parents. Instead of using actors to tell the brand story of Nature’s Way’s Kids Smart supplement range, Storyful has helped Wavemaker to license user-generated content clips of […]

DEC PR Wins Hisense Account
  • Marketing

DEC PR Wins Hisense Account

Electronics and whitegoods specialist Hisense has announced it has appointed DEC PR to lead its strategic communications remit in the local market, following a competitive tender process. DEC PR will work to support its brand building activities and managing corporate communications. The agency’s work will integrate closely with Hisense’s other marketing partners. Andre Iannuzzi, marketing […]