Each of the real players in the job board market have harnessed a traffic machine that produces huge amounts of traffic. The powerful niche boards focus their traffic development on very specific demographics. DirectEmployers, on the other hand, languishes in the niche job board levels of traffic (its Alexa ranking suggests no more than 25,000 daily visitors). It appears, from an analysis of the sites visited by DirectEmployers users, to be in competition with anyone but the major job boards.

DirectEmployers is a very interesting play. It's just not a threat to the established players. There is a good deal of sense in the idea that large employers get together to try to mange their pools of potential employees. DirectEmployers would really be on to something if they caused their members to route all of their employment traffic through the site. Instead, the site uses small player advertising and promotion tactics to peddle the silly notion that members of the association can leverage their relationship to reduce costs with the big boys.

The very same article goes on to describe the 35% decline in employment advertising revenues in 2001. This is the cost savings already achieved by the big companies. The job boards are singularly responsible for this dramatic cost reduction. To suggest that the industry needs an operation that is part price-police and part alternative sourcing mechanism defies logic.

We've argued, in private, that big customers who say "Thanks for the cost savings" by leaving their supplier for a supposed better deal deserve punitive pricing on their return. "Hang 'em in public and leave 'em there for a couple of days to let everyone know", has been our recommendation.

DirectEmployers could easily be a positive supplement to the offerings from other sources. But, by wrapping the service in the sort of rhetoric that inspired the Forbes article, the big companies who use the service have left themselves at risk in the future. Unless DirectEmployers reconciles its candidate acquisition strategy, their association members will be left holding the bag. Even if all of the 32 members of the association actually paid their dues, it would give DE only enough money to attract a trickle of traffic.

We'd refer to the tactic used to generate the Forbe's story as the "David and Goliath Press Release". The media loves a horse race and if you can position yourself as the noble underdog it's easy to get attention. Given the bad blood between TMPW and Forbes, it's hardly a surprise that the article got published without too much of a look at the real facts.

We're certain that DirectEmployers has a role to play. A more ambitiously funded operation with the same agenda could be a real powerhouse. What we see, however, is typical of the non-profit sector...really big ambitions coupled with really little pocketbooks and no sense whatsoever about the way that money works.

 -John Sumser

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