The global economy is strained to the breaking point under COVID-19. The U.S. has gone seemingly overnight from record employment levels to unprecedented job loss. According to the Washington Post, more than 17 million new jobless claims have been filed in the past four weeks. Soon, levels could be at their highest since World War II.
This has many implications. First and foremost, there’s the indisputable fact that many will suffer. It will likely also lead to a surge in traffic on online job boards and career websites once the mass of newly unemployed begin piecing their lives back together. The latter will be a long process and may or may not coincide with an economic recovery.
I also foresee a swarm of arbitrage players doubling down on buying and selling traffic to the aforementioned job boards. If I’m right (and I would prefer not to be), job seekers will inordinately bear the cost of the arbitrage model. In this scenario, a click on a job opening will send the user not to the relevant application site but will instead hurl him or her into a vortex of intermediary ads and page click-throughs, each one calculated to make a buck off the back of the one before it.
Does this process sound familiar? That’s because most job searches already play out this way. Except now, in the wake of a pandemic and mass unemployment, the stakes will be higher. And so will the profits for the buyers who run this game — at the cost of the unemployed who are forced to play it.
What Is Ad Arbitrage?
Arbitrage is not the kind of date you bring home to meet your folks. The term means many things to many people, but in this article, it refers to the practice of buying job search traffic and reselling it at a higher price. How this works is complex, but if you’ve ever searched for a job online, you’ve probably clicked on a job only to be rerouted multiple times through different sites before arriving at the actual job posting.
For job boards, this practice creates revenue; for job seekers, it creates headaches. Arbitrage subjects users to a labyrinth of interstitial click-throughs that cost valuable time. Moreover, the experience lacks transparency. You’ve already lost your job, and now you’re expected to lose your mind, too?
Now that we know what ad arbitrage is, let’s explore how the system this business model relies on came into being.
A Brief History Of Arbitrage
How did we get here? Most job boards face a branding challenge: People only rarely search for a new job. Once they’ve found one, they have no incentive to visit the job board website. How, then, do job boards build a brand when they only exist to fulfill a short-term need? Put another way, how do they sustain website traffic long enough to build a brand?
Easy — they advertise. Not all job sites rely on ads to drive traffic; some niche job boards leverage organic SEO and strategic alliances. The larger players who do not depend on advertising for their job boards already have other mechanisms in place to get organic traffic (e.g., career advice, resume optimizers, salary calculators, brand building, etc.).
For most job boards, however, no ad spend means no immediate traffic and hence no revenue. As a result, they are forced to monetize upsells — to think in terms of “cost per click” rather than “match for job.” This is not ideal. But for job seekers, the situation is even worse.
Ad Nauseam: Why Arbitrage Is Bad For Job Seekers
Put yourself in the job seeker’s shoes: He or she may well be unemployed or could’ve even been fired. Either way, the situation is already one of lack of control. Now he or she will click on what looks like a career opportunity, be redirected and spiral into a seemingly endless array of monetizations of his or her time. It might take eight or more clicks to get to the actual job — not exactly a morale booster.
Granted, ad arbitrage is only part of the story. A huge percentage of the available openings turn out to be fake — often a result of staffing agencies striving to appear in more search results to land clicks. Users who reach the application page have to fill out a form for which there is no unified platform, leaving them no option but to type in the same information yet again or waste 20-30 minutes providing what a simple resume upload could accomplish.
But while ad arbitrage alone isn’t to blame for a poor user experience, the passive role into which it forces the uninitiated job applicant makes it uniquely odious. In adding insult to injury, arbitrage delivers a fatal blow to the user’s trust.
Conclusion: Ad Astra Per Aspera
Faced with historically high unemployment rates, we will have to make a decision: Allow arbitrage players to exploit the weakness of the system to profit off others’ pains or, as job seekers, take control of our search. Tighter industry regulations would help, but they will take time to bear fruit. By then, the world will be starving.
To fix this, we should invest now in identifying our professional strengths and in defining our career goals for the short and long term. We can use AI tools, such as those available on some career sites, to obtain better job matches and end our reliance on arbitrage-driven job search. Resume upload tools that scan for patterns, as well as personality tests and workstyle games that profile job seekers’ soft skills, are great places to start.
A recession will also force companies, including job boards and career sites, to rethink their business models. The global shift to remote work will have a lasting impact that could provide new career paths.
When the crisis is finally over, the sky will be the limit. For now, we’ll have to be content with an indoor ceiling.