It’s been almost two years since the equivalent of Black Monday hit Careers at Canada’s major dailies, and the shock waves are still reverberating in publishers’ offices across the country.

Employment ads represent one of the most lucrative sources of revenue for papers, what with all those ads sold at higher rates than ROP and no need to create pesky (and expensive) editorial to wrap them around. So when employment ad volume suddenly dropped by a dizzying 30% to 60% in mid- to late-2001, a big chorus of ‘what the hell?’ issued forth from the papers of the nation.

Since then, that revenue has not returned, despite a recent increase in job creation, and publishers and newspaper owners are still commissioning studies and spouting theories to explain what’s happening. The papers have also started investing in editorial for their Careers pages, but whether that will pay off is still a big question.

‘This is pretty much a global problem, in terms of what has happened to Careers over the last 18 months to two years,’ says Phillip Crawley, publisher and CEO at Toronto’s Globe and Mail. ‘It hasn’t just happened in North America, it’s also happening in Europe and in Asia. It’s not unknown for papers that have specialized in big Careers sections to be down 30% from what they used to be.’

So far, three main factors have been fingered for the drop.

The first is the sudden onslaught of 9/11 jitters followed by continuing sluggishness in the U.S. economy. This caused a jump in the Canadian unemployment rate, from 6.8% in 2000 to 7.7% in 2002, and such thickening in the ranks of the jobless always means fewer want ads.

The second factor is the rise of the online job board. Many, in fact, say this is the primary cause for the drop in newspaper employment ads. Everyone agrees that upstarts like Monster.ca, along with professional and in-house company job boards, are stealing share from the papers – the only question is how much.

The final, and probably lessor factor, is an aggressive push by some of the local papers to pump up their Careers sections at the expense of the larger players. Papers in Quebecor’s Sun Media chain in particular have been focusing on this section of late, and seen their Career revenues grow while others saw it go.

The economy: A direct correlation?

Most papers saw their employment ads peak in 2000, and most point to the dot-com boom as the reason. That sudden crop of startups was desperate for qualified staff and page after page of high-tech recruitment ads were the result.

The subsequent bust in that sector was followed by an even more serious collapse in high technology infrastructure companies like Nortel and Cisco Systems, a collapse that saw thousands of Canadians laid off and a sector-wide hiring freeze.

This filtered down to other less skilled positions, resulting in a measurable drop in the overall number of ‘Help Wanted’ ads posted in Canada.

That drop is clearly reflected in the Statistics Canada Help Wanted Index, which measures year-over-year percentage changes in the number of ads placed in 22 newspapers in 20 metropolitan areas.

Healthy percentage increases ranging from 10% to 15% can be seen in the years from 1998 to 2000, and the drop to negative percentages in 2001 is dramatic (see ‘Correlation between employment and Help Wanted ads placed’ below).

It’s also worth noting that the unemployment rate began rising that same year, which would seem to make sense, except for the fact that back in 1998, when the unemployment rate was even higher at 8.3%, the Help Wanted Index was still high. This would seem to indicate that perhaps the drop in newspaper ads placed seen in 2001 is due to more than just the economy.

In a way, if the economy were the only factor, the papers wouldn’t have that much to worry about. Employment has always been cyclical in Canada: it would just be a matter of waiting until the economy recovers, and voilà, the employment ads would be back.

But while the papers saw employment ads fall steadily with the employment rate, Jennifer-Lee Thomas, senior director of communications and marketing at Monster.ca, one of Canada’s top online job posting sites, saw something different.

‘We did start seeing a bit of a decline in the middle of 2001,’ she says, ‘but last year, we saw growth of about 4%.’

In other words, one of Canada’s largest online job sites is seeing a recovery that the papers aren’t – and that is cause for concern.

Shifting to online: A structural change

‘When the unemployment rate goes down, the volume of advertising goes up,’ confirms Judy Master, advertising director at the Toronto Star. ‘But what has complicated that over the last few years is the online component. There’s been a real structural change in the career advertising category. The challenge is to get a handle on the extent of that structural change and how it’s changing that direct correlation between the unemployment rate and print advertising.’

Getting a handle on it isn’t easy though. Both Crawley and Ron Clark, SVP, newspaper division at CanWest Media Sales, say they don’t think the move to online job postings is a significant factor, but many outside the newspaper industry don’t agree.

‘Everybody says employment advertising has dropped,’ says Doug Checkeris, managing partner at The Media Company in Toronto. ‘Clearly there’s a runoff to online, and it hurt the newspapers disproportionately.’

Kim Peters, president of three-year-old Toronto-based Workopolis, can attest to that runoff. The Workopolis site, which is jointly owned by Globe and Mail parent Bell Globemedia (40%), Torstar Corporation (40%) and La Presse owner Gesca (20%) has seen the site’s postings rocket up from 15,000 in January 2000 to a current average of about 31,000 a day.

Similarly, Monster’s Thomas says her site has grown from 600 jobs in 1997 to an average of 25,000 today. Even more interesting is the fact that Peters says that only about a quarter of the postings on Workopolis come through its family of newspapers.

Thomas, who says Monster has no current plans to hook up with a newspaper (but wouldn’t rule it out as a possibility), says that online sites are indeed stealing share from the papers because they can turn around ads faster, they offer online resume filtering and other processing tools that papers can’t, and they’re cheaper.

‘I believe the papers have blinders on,’ she says. ‘They’ve had a hold on the market for so long, they’re even raising rates while readership declines. I really don’t think that they’re going to get that business back.’

Keep an eye on the little guy

While the big guys like the Globe, National Post and Toronto Star have seen employment ads drop, some little guys like The Winnipeg Sun have seen the opposite.

Gordon Norrie, publisher and CEO of the Sun says his paper has seen its new Sunday Careers section increase placements by ‘at least 150%’ over the last year, although he admits Careers still generate ‘a very small percentage’ of total revenue.

Norrie says part of the reason for the Sun’s ‘phenomenal year in Careers’ is that local papers may have an edge over national online boards when it comes to advertising for local positions, but the main factor is the pricing.

‘If you ever get your hands on a rate card for a traditional broadsheet, you’ll see that Careers is extremely lucrative for them. In our market, they charge about triple the rate per line compared to a regular ad. We charge fair market value. We don’t distinguish between a Career advertiser and any other type of advertiser.’

So what now?

In a way, newspapers were very quick to react to the threat of the online job board, with almost every daily in the country now affiliated with some kind of online initiative of its own.

But it can still be hard for publishers to kiss profit-boosting revenue goodbye, even if it’s going to another division of the parent company.

That’s why many papers are investing more in content for their Careers sections and spending more to promote them.

The Globe began producing a new beefed-up Careers section every Wednesday last September, and Crawley says he saw an ‘uptick in share of market’ fairly quickly.

‘For the first time in probably a year and a half, in November and December we saw our Careers volume beating the previous year. We don’t know whether that represents a trend – it’s too early to tell – but we’ve had two better months in a row, so we feel like we’ve turned a corner.’

The Toronto Star too, is trying new gambits to grow Careers. ‘To promote the section we’ve launched an in-paper promotion program called The Works,’ says Master. ‘We’ve also done a number of special editorial sections that are geared to certain advertising categories. For instance, health care was one of the growth categories last year, and we did four special sections that were very successful for us.’

Master adds that in addition to upselling Career ads to online, the paper has pulled in a third medium with Careers TV, a half-hour show on Toronto Star Television touting jobs posted in the paper.

Finally, CanWest’s Clark says that as well as offering Careerclick.com postings to every CanWest employment advertiser, some papers have recently beefed up their Careers editorial coverage, and a number of CanWest papers have had great results sponsoring local career fairs.

‘Those have been highly successful,’ he says, adding that they help align the local paper’s brand with job-hunting and give advertisers a reason to post category specific jobs with CanWest. ‘They work.’

But will the papers ever see employment ad levels like they saw in 2000 again? The general consensus is that they won’t, and even Clark says ‘Who the hell knows?’ when first asked.

But then he pauses, and reflects for a second, and becomes more confident.

‘Do you know what? I think so. When? I don’t know. But there’s no reason to think that it couldn’t happen again. The peak in 2000 was a strange phenomenon, but then again, those phenomena happen.’

CanWest to launch new ‘eBay’

Classified advertising, which includes the ‘help wanted’ sector of general employment, has also seen a bit of a drop of late, although it’s nothing compared to the plunge in Careers as a whole.

Still, some papers are experimenting with new ways to fight an unexpected new rival that crept up under the guise of the online auction site.

eBay may not be a direct competitor per se, but most agree that some of the books, records, bikes and even cars that may have been sold through classifieds in days gone by are now being put up for auction online.

Ron Clark, SVP, newspaper division at CanWest Media Sales, says his company is going to take eBay head on with a newly refurbished national online auction site called Auction Mart launching this March.

‘The number of consumers that we already deal with on a daily basis who are trying to sell their couch or whatever is pretty amazing,’ he says. ‘So we’re going to harness that. All the CanWest papers will help mount it. It will be like eBay: There’s a bunch of items that you can bid on.’

Clark says this is actually CanWest’s second attempt to launch the site, calling the first attempt ‘a tremendous learning process.’ He says all the bugs have now been worked out of the system, ‘because if you’re going to do an auction with Mr. and Mrs. Jones, you better not screw it up.’

The site will initially focus on business-to-consumer auctions, leveraging CanWest’s network of retail advertisers to get the bidding going. Eventually, Clark expects to see more consumers putting their items on the block, and there may even be some way to package auctions with classifieds placed in CanWest papers.

The launch will be backed by the CanWest machine, with integrated promotional messages appearing on Global Television, Canada.com and in CanWest papers come March.

‘We think that with the marketing clout we have and the franchise we have, we’re in a better position than anyone else in Canada to make this concept really sing.’