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Marketing in online education is a different game than for traditional higher education - different in scale, infrastructure, and in key metrics. But without it, how would an institution reach new learners?
This conversation delves into the complexities of marketing in online education, focusing on the challenges faced by institutions and OPMs in recruitment and enrollment strategies. It highlights the increasing costs associated with marketing, the impact of demographic shifts, and the need for precise measurement of marketing effectiveness. The discussion also touches on the differences in marketing approaches between traditional and online education, emphasizing the importance of adapting strategies to meet the unique demands of online learners.
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Transcript
Cost Issues in Online Education Marketing
00:00:10
Speaker
Hello and welcome to Online Education Across the Atlantic. And today we're going to have um sort of a part two conversation. Our last episode, we talked about marketing and student recruitment for online higher education.
00:00:26
Speaker
And we sort of left with this question about the cost involved in this because that drives a lot of the strategy of marketing for online higher education is the cost issue.
00:00:37
Speaker
um And we talked about that in a perspective of AI and not truly rethinking um how to do marketing and recruitment. And ah particularly with OPMs, there's a question about what are they truly doing new things or are schools doing new things?
00:00:55
Speaker
Well, that leads to the question, let's talk about some of these costs that are involved and what that means.
Morgan's Scandinavian Tour and Cultural Insights
00:01:00
Speaker
So that's what our episode is going to be about today, is a deeper conversation.
00:01:06
Speaker
Plus, we had a nice ah write-up um ah where somebody had listened to that podcast and had some thoughts, and we want to address her post as well. But ah before we get to that, first of all, Morgan, welcome back from your big Scandinavian tour. Thank you.
00:01:23
Speaker
I know you had quite a bit of travel involved, but ah it's good to see you. How was your trip? um My Scandinavian trip was awesome. um a little A little too mobile, perhaps, but I was in Denmark, Sweden and Finland. I got to hang out with Roger Larsen, who has a long history in edtech.
00:01:44
Speaker
Um, founded Fronter, now founded Norvalid, um, and, and really interesting thinker about, about the EdTech space. Got to hang out with him in Oslo, which is fast becoming one of my favorite places and got to eat some amazing, amazing, amazing food and mostly pastries and, and, and fish of various kinds.
00:02:02
Speaker
Um, especially smoked salmon. Have you, uh, done your typical, uh, gone home and learned how to bake a specialized pastry or fish? Yes, I'm working on Karelian pies from Finland, which are these little, little pies that have a rice filling, a rice porridge filling that you then chop with hard boiled eggs that my spouse became enamored of.
00:02:26
Speaker
And so I was given notice to to learn how to make them or else. I also, um ah you know, i i I don't drink alcohol um and I had some amazing non-alcoholic wine.
00:02:39
Speaker
um Yeah, which which shocked me. But one called Odd Bird, which is either from France or Italy, depending on which restaurant I was at. um A sparkling wine. Another also sparkling white wine called Eins, zwei, zero.
00:02:54
Speaker
I need to get some get some notes on this. You know, in honor of both of you, I had to try some non-alcoholic wine, and at least with red wine, I have to admit, looks good. No, you've got to stay away from the If you want to cover yourself at a cocktail party, it looks like wine.
00:03:10
Speaker
That's the best I can say about it. Yeah, you really need the acid to give it some some some body and some taste, so you really need white.
US Higher Education Enrollment Trends
00:03:18
Speaker
Well, it's great to see you as well, Neil. i um are the Are you now getting into family summer mode?
00:03:26
Speaker
ah Yeah, I mean, my kids never seem to be at school at the moment. But, he's ah you know, we've we've had the one indicator that summer's arrived in the UK in that the first test...
00:03:37
Speaker
first test matches is starting so you know Morgan will appreciate this England currently 302 for one against Zimbabwe um in the first test so you know that is a sign that the English summers started you know and on the sporting theme I just have to say I'm a Spurs fan and we won the Europa League um trophy last night for any football fans or soccer fans out there Come on you Spurs. Come on you Spurs, absolutely. So, you know, Spurs are doing well, England are doing well, the sun's shining um until bank holiday weekend coming up.
00:04:12
Speaker
So yeah, it is, yeah, it's getting there. I feel this podcast is getting away for me with the non-alcoholic drinking and the cricket and the proper football, but I'm trying to learn. I'm trying to learn.
UK Government Policies and Sector Challenges
00:04:28
Speaker
So ah before we get to our main topics, the thing as I was browsing this morning, the big news is National Student Clearinghouse in the US just came out with their updated enrollment numbers for higher education.
00:04:42
Speaker
And for spring of 2025, the enrollment has gone up 3.2%. ah Some areas like primarily online institutions are higher, like 3.9%. I think graduate enrollment has gone up this time, but only 1.5%. But the general message or the general thing is we've now had, i is it three or four semesters in a row of enrollment growth?
00:05:12
Speaker
that we're seeing in the US. um But at the same time, i think most schools at this point are acknowledging the fact this is coming into the entry into the demographic cliff. Like we're projected to hit peak 18 year olds in early 2026, and then there's a long term decline.
00:05:33
Speaker
So it's great to see enrollment increases and for multiple ah terms in a row. But at the same time, that doesn't mean schools are saying, ah, this is fixing our finances. It's just, okay, at least this issue is not as bad as it used to be.
00:05:49
Speaker
um So that's probably the main thing I'm seeing over here, other than the ongoing reconcile reconciliation bill, which could be leading to risk sharing a new concept, which, by the way, i'm going to start covering in a lot more detail, including data analysis.
00:06:05
Speaker
But Neil, anything happening on on your side? Yeah, I mean, I think the then the main bits of news are around government policy and around the continuing announcements of universities cutting jobs. So one of the big things that came up recently was around international...
Phil's Lawsuit and Financial Transparency in Education
00:06:23
Speaker
ah education policy so the government proposed a cut to the graduate route which is how essentially how long and international students can stay in the UK so they propose that that would come down from two years to 18 months they also interesting suggested that they'd that they kind of take a six percent cut of international student um fees, which I think was a was a bit of a curveball from them. so So that was interesting. So um neither of those are particularly good pieces of news for the sector. So, you know, the general theme over here is still um tales of tales of woe from different sources, essentially.
00:07:07
Speaker
Well, I wouldn't term ours as not having tales of woe. It's just at least on the term-to-term enrollment, ah that's actually been one piece of positive news. So I wouldn't over-interpret good things happening over here. Yeah, well, look, our tale of woe is that we don't have but data recent enough to be able to tell us that.
00:07:26
Speaker
Yeah. oh Data is good. i ah Phil talking about data reminds me that he was he was insulted ah in ah in ah in a lawsuit this week as a purported expert.
00:07:40
Speaker
oh That's right. That's my new title. The proportion expert. Yes. Yeah, basically, that ah it surprised a lot of people. The U.S. Department of Education is fighting back on the lawsuit against gainful employment and financial value transparency, which was ah the version three was created by the Biden administration.
00:08:01
Speaker
The Trump administration is fighting to keep it pretty strong. I have actually done data analysis, so I've been part of the lawsuit. And as Morgan said, they deliberately insulted me, called me the purported expert.
00:08:16
Speaker
I'm just trying to drive drive them into a battle of experts. and Yes, ah it I mean, you do know I enjoyed being insulted that way.
Marketing Challenges for OPMs and AI Innovations
00:08:25
Speaker
so Yeah, i've I've heard you called a lot worse than that, to be honest, Phil, but I don't think you could mention that on the podcast. that's just by me. Yeah, that's right. yeah Yeah, they didn't go far enough.
00:08:35
Speaker
right, so let's get to our topic about the market ah marketing. But in one way to look at this, I want to do a segue. ah So there was a nice post by Andrea McConnachie.
00:08:46
Speaker
ah That's my attempt. I will find out if I'm pronouncing her last name correctly with feedback. She is a executive vice president of marketing at all campus. And let me just read her intro because it gives a nice summary of the episode we just did. And then we can mention, you know, some of her points.
00:09:05
Speaker
So she wrote, recently had the opportunity to tune into an episode of Online Education Across the Atlantic, in which Phil Hill and his colleagues, Glenda Morgan and Neil Mosley, discuss the marketing challenges that OPMs and their university partners face.
00:09:22
Speaker
And just to clarify, we did talk on the even the non-OPM side. It's a valuable conversation, one I encourage anyone in or adjacent to higher education to listen to but The episode raised important questions about the sustainability of the current digital marketing playbook, whether OPMs are innovating quickly enough, especially in the age of ai and what taking marketing in-house instead of partnering with an OPM really means.
00:09:50
Speaker
As someone who leads a team responsible for driving enrollment growth and marketing online programs across dozens of university partners, I wanted to offer a perspective from inside the OPM world, an inside look at how we actually operate, what we prioritize, and how we're evolving.
00:10:09
Speaker
um So for me, actually, I like that. That did capture it captured the gist of our episode accurately. And I'll just point out a couple of her main points, but then get your thoughts on it.
00:10:22
Speaker
Her headings, it's not just about speed, it's about precision. And she recognized, she said Phil was right in saying that OPMs are built for speed. But then she talks about precision.
00:10:34
Speaker
ah On AI and innovation, it's evolution and not hype. I'll get your view on if you really address that. The myth of the static playbook. I think that's, I read that as a shot across Morgan's bow. She's the one who brought that up in the previous episode.
00:10:52
Speaker
And what Ebenhaus really means. And talking about spend, which we're going to cover. And my ah marketing is not a silo. So first of all,
00:11:03
Speaker
I really appreciate her listening carefully to the episode and it leading to somebody adding thoughts from this perspective. But I wanted to check with you. Any ah points you guys have or things you noticed from her article?
00:11:18
Speaker
um I think one general point to make is that when we're sort of discussing this, we are talking generally across a whole range of different companies. And so, and obviously I'm focused on the UK side of things. So I definitely um would say that um there are some, there is some evidence that I've seen that there is a bit of a static playbook.
00:11:41
Speaker
you know I can't say that across the board, and I know that they're, not saying that companies aren't evolving aren't looking to change some things, but i think I think that's an important point to make, that there's some generalization across a range of different companies, and some companies are kind of pushing further than others. Some, for so for reasons such as kind of company upheaval, means that they they're not necessarily as dynamic in this area as they might be.
00:12:10
Speaker
So there will always be um there'll always be people at different stages, but I think that's why that's what that's what I'd say. I mean, it's it's a reflection of some examples. It's not a reflection of the whole... um Every example. Yeah, exactly every example.
00:12:27
Speaker
um
Transparency in Marketing Spending for Online Programs
00:12:28
Speaker
I think that's that's what yeah that's what we kind of the article made me made me think. And I had to reflect on this in in some detail recently at ASU GSV where I had recently wrote written that post about the problems with efficacy research, and I upset a lot of people. um And I like to think that means I'm saying something worthwhile, but I had to sort of walk around and say, i didn't mean you, i didn't mean you. but what what What's true of the general is not true of every particular case.
00:12:59
Speaker
In a way, it's like an interest it's a's sort of an interesting conversation, but there's an element of we're talking about the sector at large and we're actually talking across two kind two countries.
00:13:11
Speaker
um And also, um I thought the article the article was really useful and really good. But also, if you're ah representing a company, then you obviously want to present your company in a good light. And I'm not saying that anything that was said was...
00:13:24
Speaker
and amplified or anything. But obviously, you know, we all have different things that we bring into the debate and discussion around this kind of thing. So, there's, well, I didn't take her comments as a critique of our podcast, I took it as, okay, this was a valuable conversation.
00:13:41
Speaker
Now let me give you my view from one company from the inside to add to the conversation. So, I mean, I think, I don't think she would disagree with us on this as well. And she deliberately was giving her perspective.
00:13:54
Speaker
I will pick up on this ah this this question though. When she talked about the myth of the static playbook, I don't think she fully captured the point because I think what we're talking about was structurally like how can you do marketing and spending in this area in a different way particularly generative ai is significantly different does that change targeting does that change your operations that was the point was a structural What she said was essentially pointing out an iterative learn quickly and adjust type of mode.
00:14:33
Speaker
She talked about we've seen programs where our initial strategy and tactics didn't deliver. And in those cases, we pivot quickly. We try different things. So she's talking more tactical feedback loop learning and adjusting, which is great.
00:14:49
Speaker
Our point, Morgan's point, was much more on the structural playbook level. And so I still think that's something that needs a lot more ah discussion, but I really appreciate her inside view.
00:15:04
Speaker
I will point out one other thing, then we'll get into our main topic. She had a section called Let's Talk About Spend. and And she said, there's a tendency to focus solely on media dollars.
00:15:15
Speaker
How much goes to paid ad on Google and LinkedIn, for example. But what's often overlooked is the time and expertise that goes into performance. For example, SEO, search engine optimization is one of our most powerful tools, but it requires a lot of collaborate.
00:15:33
Speaker
collaboration to make that work. And then she points out it's not cash out the door, but it's a significant investment in talent and time. So I think that's a really good point she's making and adds some context to what we're ah um about to talk about. So thank you very much. We encourage more follow-up discussion um and alternate points of view.
00:15:56
Speaker
So let's talk a little bit more about what this spending issue really looks like and what are the issues. And let's start out from a U.S. perspective, partially because I think we tend to spend more in this area. So Morgan, tell us a little bit ah about marketing with four online programs and what you've seen.
Inefficiencies in OPM Marketing Strategies
00:16:18
Speaker
So, you know, part of my interest in this issue comes because it's the big online programs that suck up all the media coverage, you know, so you hear a lot about Southern New Hampshire and Maryland Global College and Purdue and so on spending a hundred odd million per year.
00:16:37
Speaker
um I think i forget I forget the exact number of Southern New Hampshire, but last year they spent you know, 180 or something like that million, of which 69 million was was ah was Google spend.
00:16:49
Speaker
But, you know, they suck up all the the headlines and the discussion and people talk as that as though they are the the average. And they're not the average, they're the far, far, far outlier.
00:17:02
Speaker
um You know, and and so part of why I got interested in the topic was because I wanna find out what the what the more general typical state of play is and we shouldn't be focusing on these kinds of things it's like talking about company income and comparing phil hill and associates with google or apple or something like that you know it's it's you know it's it's it's a very different thing so i've been trying to dig into things and part of the problem is is that we don't have great data you know um and so i've been both looking at reports from places like
00:17:39
Speaker
Ruffalo-Null Levitz and Simpson Scarborough and OHO and places like that. And then looking also at individual reports from institutions, especially when they try and propose something and that's proposed rather than actual spend. But, but, you know, we're still sort of looking at, um, uh, at least ah a vastly different world and, you know, but, but there's real problems with, with getting the data and with coming up with some really good numbers and i can talk more about what they actually start to look like but i'll stop there no no don't stop there because i think it'd be a good marker well first of all i do want to ask the question the ones you hear about the southern new hampshires the very large online so one way i would categorize this but i want to see if i'm thinking about it right it's not just that they're large and therefore if you multiply with huge number of students
00:18:32
Speaker
It's more of an institution whose goal is to almost unlimited scale. That might be too strong. But the point is, we want to scale. We want to continue growing. Whereas there's a lot of online programs that are more like, well, as long as we get to this level and it's self-sustaining, we don't we're not trying to grow beyond that or it's very limited growth. So it's sort of the goals of the institution, not just the size.
00:18:56
Speaker
Is that accurate? Absolutely. And I think one way, one interesting way of looking at it, and i I can't do this now, but I'll do it maybe when I write about it, is look at a sort of spending per student, because that was is one way where it would come out. But in other ways, even some of the well-established, what we think of as being fairly large um programs have different goals. So you've got a Southern New Hampshire, and then you've got a Penn State World Campus. And I was at Penn State in 2014 talking with them about this. And at that point, they had a goal to to to substantially grow. I think they were aiming at 20,000 students.
00:19:33
Speaker
Some years later, they really pulled that back and they want they've they've got an upper limit of, I think, around 14,000, 15,000 where they don't want to go above that. So they even though they're a large, well-established um program, they they they want to keep it smaller. So there's a big difference there.
00:19:51
Speaker
I must also apologize to Southern New Hampshire, ah because part of the reason why we pick on them is because they are actually very transparent in their spending. And they put it in their 1099, whereas many places bury it in all different kinds of places. So we know what their spending is because they're just very transparent about it.
00:20:10
Speaker
ah so before we hand it over to Neil, put a stake in the ground. What are the rough ranges on the metric you mentioned, marketing spend per student, ah just to give a sense?
00:20:23
Speaker
So Ruffalo-Null Levitz has an average from last year of about ah just just under a million dollars for for an institution spending on online.
00:20:35
Speaker
And so that's also a complication of the data is like some some data comes from central marketing, some is specifically online. So you've got a confusion there. So, you know, to say, you know, it would be ah about $100 per student, um if you take that the entire student body or or maybe, you ah you know, a larger amount if you just look at online, but that's the that's roughly the average is about $1 million. dollars for What about, and I want to focus more on online, because I've seen an online in the US, particularly OPM, that quite often you're talking about $1,000 to $3,000 per student in marketing and recruitment spend. I would say it's higher than that, because that's also almost the the the Coursera amount, which is around about $1,500.
00:21:26
Speaker
You know, I would say it would actually be about $15,000.
00:21:31
Speaker
I saw some numbers with to you getting up into the $15,000 range, but I also... My personal feeling is that's an outlier and it was based on particularly when pre-EDACs when they were going for a small number of students at elite programs. So that does give a book into it, $1,500 to $15,000 per student for fully online.
00:21:52
Speaker
And, you know, the problem is is at the moment I'm not in ah in ah in a head space where I can really abstract a away because I've got too many examples in my head. Well,
UK University Marketing Strategies and Challenges
00:22:02
Speaker
we'll talk about that. Yeah. Yeah.
00:22:03
Speaker
Yeah, you know, I know of one program where they spent $300,000 to recruit eight students. Well, yeah, but that's called a fail. That's called a failure. So, so. All right, so Neil, let's, ah let's jump over to the UK in particular. What have you seen in this topic, particularly around marketing for online programs?
00:22:26
Speaker
Yeah, I mean, I think um ah similar to what Morgan's saying, it's really hard due to the absence of any transparent data reporting to to know the marketing spend specific to online. and And the kind of benchmarks that I tend to have are through conversations you have around OPM companies. And certainly, you know, the range that you're talking about kind of over a thousand £1,000 as it is in the UK for kind of cost of acquisition for students definitely um chimes with me. Obviously it kind of varies from company to company.
00:23:04
Speaker
But I mean, you've got, there's so many different costs depend relative to where an institution is really fundamentally. I mean, like I guess we're talking about the spend, you know, if we, if we just steady state.
00:23:16
Speaker
Yeah, we're talking about the steady state. And so, you know, my, this may just be a quirk of some of the clients I work with. But, you know, there's, there's even some of those universities I know, they're a bit more mature on this, there's still so much more ah distance to travel relative to ah really strong, mature OPM experience.
00:23:38
Speaker
model across a whole range of different things. You know, there's just the fact that, you know, online marketing, you know, has to be more sustained, it's less of a fixed cycle. And I think, you know, one of the things um we talked about in terms of the the LinkedIn response,
00:23:56
Speaker
is it i I think one thing that shouldn't get missed his see is the kind of people resource, the increase in capacity to do a lot of these things, to kind of set up a nurture sequence, to deal optimise your CRM, to produce, even if it's AI generated, produce great content.
00:24:18
Speaker
ah You know, all of these different things, I think, involve an increasing kind of people resource, an increasing in kind of marketing tech, as well as all of the budgets that we're talking around, around, you know, the channel and the paid side of stuff in terms of social and search. And then you have all the affiliate listing sites.
00:24:38
Speaker
And then you've got to monitor the quality of those, how well they're performing. Are they generating enough leads? Are they generating high quality leads? So you've just got... you know, a whole bunch of and considerations that involve more work and more regular expenditure.
00:24:55
Speaker
um And I think, you know, in general in the UK, I don't think that I can't think of many universities sort of crack that and are just optimising across those activities.
00:25:09
Speaker
So on that subject, on the lead, it it reminded me of, I'll do this, it's anonymous. I mean, we we know who it is. But we got really good feedback from the previous episode in a private email.
00:25:21
Speaker
I'm not sharing the person, but somebody who knows the inside of the market very well. And one of the points was, I am constantly amazed by the fact that measurement systems and appropriate tracking of the correct metrics is missing.
00:25:36
Speaker
And the conversation there is ah about OPM companies. So companies where this is their specialty. So the criticism is those people.
00:25:46
Speaker
ah So we're not even talking about universities who don't even think about this in a professional sense, but OPMs. ah the correct metrics is missing. like Probably worth a deeper conversation, but the area is centered on cohort-based lead to enrollment tracking by channel type.
00:26:04
Speaker
So brand versus keyword social, and that's inadequate and poorly attempted ah attribution modeling.
Measuring ROI in Education Marketing
00:26:12
Speaker
So basically, how do you track TV advertising? Does that translate over to digital and then social media?
00:26:21
Speaker
um And the first touch and last touch. So we're not experts in marketing on this podcast. I certainly am not. But it raises questions. yeah So the argument there is even inside the specialist companies who do this, they haven't fully figured out how to do all of this attribution.
00:26:42
Speaker
And i think that point about TV to digital to social is huge because when you talk just a regular university not using an OPM, How much of their marketing really is based on the brand of that university that happens from not just TV, football games in the U.S., but, you know, that general brand?
00:27:04
Speaker
And how do you attribute that down to students caring about that university, then wanting an online program? and then the social and then closing the deal.
00:27:14
Speaker
but So it was an interesting point talking about that there's there's still a lot to learn, even within the companies who specialize in this area, particularly around tracing it. So that's part of the reason I think it's also difficult to say what is the spend.
00:27:33
Speaker
I think they try to hide a lot of marketing, but I think it's hard to answer the question too. Yeah, i I think I'd add on that, sorry to just put in Morgan, that I've definitely seen examples of universities over here or opm's working with universities um where it feels like because the level of budgets that they have they're kind of they're everywhere particularly for period periods of time and it's interesting when you kind of have conversations with universities who are you know weighing up that array of channels that the university for an OPM partnership are on and what they think about the performance of those channels and that makes me think sometimes that the the scope of the budget and the possibilities to be across and visible across all of these channels um can sometimes perhaps mean that there's
00:28:27
Speaker
you know, less of a focus on like how well are all these performing? um You know, whereas a university has a smaller budget, you know, they have to be a bit more focused on that. So that's one thing that I've i've witnessed here.
00:28:41
Speaker
In general, I would say measuring return on investment is so is a very weak part of the marketing place. And it's acknowledged as much, I would say, by marketing professionals in the online space, especially.
00:28:55
Speaker
um and And part of what they're also dealing with is that what they understand, even if what they understand to be important is not what the leadership of the institution finds to be important. So they they find themselves having to repeat bad metrics because that's what the leadership wants, like clicks, you know. um Yeah, and things like number of leads generated. I mean, that's a really interesting area. You know you can have a huge amount of leads, but how good are those leads? how you know what What's the quality um of of those leads as well? And so, yeah, that's where you can get in that.
00:29:32
Speaker
ah The met metric kind of drives the drive so the activity a little bit. One thing that's interesting, we're talking about the missing data. That's true even with publicly traded companies. So when 2U was ah you know public and you would look at their data, it was pretty difficult to be able to sort through their reporting.
00:29:55
Speaker
and come down to an accurate answer of, well, how much do they spend marketing per student? Because I think that's the most natural metric that people want to be able to think about is spending per student. The cost of acquisition, yeah. Yeah, but then, all right, so that gets into the cost of acquisition, CAC, C-A-C.
00:30:17
Speaker
Outside of higher education, that is the primary metric to track this type of issue. How much are we spending to acquire a new customer? Well, it's complicated here because for an OPM, who's your customer? Is it this new student in a program or is your customer...
00:30:36
Speaker
the picking up a university as a partner. So definition of customer is tricky. But my point is, therefore, even with publicly traded companies, it's hard to go down and attribute a number.
00:30:51
Speaker
And then to keep picking on to you they own edX. So even when you do get the numbers, separate and Coursera, they have degree programs and they have free programs and they have paid programs.
00:31:02
Speaker
Well, how do you attribute this spending for... MOOCs versus a master's degree program because those are fundamentally different, but you can't get separate reporting.
Traditional vs Online Marketing Strategies
00:31:15
Speaker
ah So that's true. And then, Morgan, you mentioned the four 990s in the U.S. s that tracks nonprofits and universities. Then it's just a complete mess outside of maybe southern New Hampshire trying to get information.
00:31:29
Speaker
um So I definitely, yeah, it's definitely tricky. right, but let me pick up on one thing. And it's not just that I know I keep going to the abstract, what's the summary, but Morgan, you mentioned it.
00:31:41
Speaker
the Across an entire university, you're talking a hundred hundreds of dollars on marketing across per student across all students. Let's just take that as an assumption.
00:31:51
Speaker
Online programs were both UK and US talking about $1,000 or more. So you're talking about at least an order of magnitude.
00:32:02
Speaker
So Online programs, it tends, at least where it looks like you're talking a fundamentally different marketing spend per student. hu Is that accurate?
00:32:14
Speaker
Why is that the case? Should that be the case? I think it's accurate. um and and and And probably even more accurate than we think, because in I was pulling that data from a Ruffalo-Knowle-Levitts report, which i I think, you know, is based on a survey. And, you know, they did they did a great job as far as they could. But, you know, it's a small survey and the survey is biased in favor of smaller institutions with centralized marketing.
00:32:42
Speaker
um So I think it's it's even you know it's even more advanced as an order of magnitude. Sorry, what was your original question? Well, part of it is that accurate, but then getting into a why is it and should it be that way? What are your thoughts, Neil?
00:32:55
Speaker
Yeah, I mean, I think I can speak at this in terms of the UK. I mean, one of the reasons why, I think, is the different demographic of learners. I mean, look, if you juxtapose, you know, the your typical undergraduate student, your typical online student,
00:33:11
Speaker
you know, they're they're different in age and stage and that that has an influence on marketing because generally if you're a younger adult having come through school, you know, you're on a set pathway, you're already doing research, you're going through a central admissions service and therefore that journey from and and interest in further study at a university into application and the the way in which you might grab the attention of that person for your university is kind of fundamentally different from me as an adult thinking, you know what, I want to do an m engineering management masters, say, just put that out of the air.
00:33:53
Speaker
Okay, I've got to do my own research around what universities offer that and I'm doing it in February, because i just it came up in February. And so and that's one of the fundamental differences is that you know i'm not I'm not a student that's going through school that the teacher's telling me, oh are you going to apply for UCAS? You've got five five or six choices.
00:34:14
Speaker
you're you're kind of You're having to grab people who are just thinking about this at at different stages that aren't that don't have in the UK a centralized area. So I think that's one of the big fundamental differences for online. And obviously demographics may change, but um I think that's one of the reasons why the tactics are different and the spend are different because you know you chat to some universities over here and they say oh well we're going to a yeah UCAS road show or you know there's there's kind of easier ways and maybe I'm doing them a disservice here but there's slightly easier ways for them to reach a prospective undergraduate degree audience that are going to come on campus than there are on this kind of mass audience that could be anywhere thinking about it any time for online degrees and partly you know I i recently did a thing where I spoke to lots of
00:35:07
Speaker
of online leaders of of of education. And one of them explained it very concisely to me, which is that marketing is different for an on-campus program than it is for an online program because that the order of of of preferences is different. So with a typical on on-campus undergraduate program, particularly brand is important.
00:35:29
Speaker
The brand of the institution, it's institution brand, and then college sometimes, particularly if you're in a professional program and then program. it's It's reversed actually with ah with online. You know, a program is much more important than college and then institution. So you can't coast off that brand, which you would typically do for an on-campus program. So you've got to really do different things.
00:35:53
Speaker
would add ah to this sort of our first episode to talk about speed. Everything with online is about speed. And Neil, you were mentioning it's fundamentally different, an adult in February looking at a program.
00:36:06
Speaker
There's also the element that is true traditional marketing, you might take days or weeks to respond to somebody who's interested. Months. Months. Yeah, exactly. But they're not going to school until September. So that's part of the process. You accept it.
00:36:21
Speaker
And that happens. Whereas in online, well, if you're not going to respond to them, somebody else is. And so there's a competitive nature that's introduced much more in online education that's based on speed, is that you need to be able to respond to students who are asking for, or prospective students who are asking for information.
Resource Allocation in Online Program Marketing
00:36:43
Speaker
So I guess that whole speed issue that and even Andrea was talking about. And that drives up cost. And the data shows that students online expect speed and they will respond and they will end up re-enrolling with the first person that that responds to them in general.
00:36:59
Speaker
Yeah. And I think just to add a bit more flavor to that, I mean, in the UK, there's definitely been, and I had a conversation the other day about this, there's definitely been instances where actually one where a partnership falls down is actually where the university is playing a role in that speed, but not...
00:37:19
Speaker
and not working quickly enough with the leads that the OPM is generating. And that it tends to be, the narrative tends to be, you know, when things go wrong, the OPMs are the bad guys, the universities are the good guys.
00:37:32
Speaker
But there are are a number of instances where the universities haven't been able to operate at a speed which fundamentally hampers that relationship working well.
00:37:42
Speaker
And if I can just go on one other thing, I think the other thing and relative to the spend is also where a university is in terms of the online market. know, for some, they have no presence in the market at all. And so there's that sense in which There's that need to invest, not just to recruit the students, but also to kind of um develop a presence in the market as well. And I think that has an influence on the level of investment at what stage to So let's pick up on this because I think we're talking around a common theme, traditional university and college um marketing.
00:38:23
Speaker
We think of it in terms of hundreds, low hundreds of dollars on spend per student. We think of it in terms of weeks and months responding.
00:38:35
Speaker
We think of it in terms of brand awareness. So it's just so fundamentally different. So on the online programs, you're up at least an order of magnitude in cost, um you know, up into the thousands of dollars or pounds per student.
00:38:52
Speaker
You're talking about minutes and hours response. ah You're talking about changing the priority of what you look. I think this tension that we're, we described this in the last episode,
00:39:05
Speaker
It's unfortunate that it's called the same thing, marketing, because I think that leads a lot of universities to think, oh, so now we've added some modality, we need to do some specialized marketing here without recognizing, no, this is just but a fundamentally different practice once you get into fully online programs. And that's a huge source of tension.
00:39:28
Speaker
and And that's sort of part of my frustration with trying to trying to learn about the space, you know, because Some of my data source is about marketing in general. you know So like the Simpson Scarborough ah Chief Marketing Officer surveys, which show that there's very little spend on technology, ah especially outside of large institutions, and and and and you know they're not investing in data and things like that.
00:39:50
Speaker
I wonder how much that is true about online marketing, which lives often in a different place. um Well, let me jump in there. CRM, right there. You can get by with traditional marketing to have an inefficient or even a non-existent CRM in marketing.
00:40:10
Speaker
And online programs, you need to have the technology infrastructure to be able to respond. And quite often, CRM is one of the key components. Well, there, for a typical university, you're talking hundreds of thousands of dollars to get one in and get it set up the right way.
00:40:26
Speaker
So I'm going back to Andrea's point. It's not just media spend with Google and Facebook and LinkedIn. It's also infrastructure spend. And then ah you mentioned, Neil, and also presence in the market.
00:40:40
Speaker
And so there's a lot of, let's just call that broadly, infrastructure spend to be able to get into the game. Brand versus performance marketing. sort of yeah you know So big picture versus more tactical.
00:40:54
Speaker
Yeah, and i think I think it's priorities as well. I mean, I think it's interesting because I think in this discussion, if we're talking about hypothetically universities and then what they'd need to kind of invest in, you know, it certainly would be roles as well. And we've had a bit of a debate over here with things coming up around, you know, an increase in...
00:41:15
Speaker
professional services staff and kind of the questioning of any other role roles that aren't academic and and that's you know slightly where my mind goes with some of this because if you if you're saying you need to spend more money but you also need to recruit more people in that in that in that kind of bucket of staff categories. and And often they're going to be expensive. Exactly, exactly. And so how does that play out with the, you know, that kind of constant debate that's running along of like, oh, especially at the moment with finance, oh, look at how yeah how many more professional services staff this university has recruited over the last five
Internal Competition and Marketing Costs
00:41:52
Speaker
years. And it's like,
00:41:53
Speaker
Administrative bloat. Yeah, yeah. And, um you know, that's, yeah, that's quite simple man-working to jump on, you know, without a lot of nuance. Well, let's take... ahead, Morgan. One thing I want to also, like, not only is spending in different buckets and it's hard to capture it. So I've been looking at actual university budgets for online programs and where, you know, online marketing spending shows up in different buckets.
00:42:21
Speaker
So it's hard to get ah an overall picture. But not only that, but I saw in one of the surveys I read that 20% of schools said that marketing happens outside of the central unit.
00:42:33
Speaker
I think that's a central marketing perspective. I recently, as I said, for a client, did a bunch of research, spoke to a lot of online learning leads around the country, and all but one said that marketing happens in the individual departments, literally.
00:42:50
Speaker
So it was like 1%. said marketing happens in the individual departments. And it's also one of the things that drives up spend because they land up bidding against themselves in some of that purchasing.
00:43:01
Speaker
You know, when they're buying keywords for Google, they're but they're bidding against the their own people, you know, so it actually drives up spend, but it's happening all over the place. In 99% of the institutions, ah have online marketing happens within the online unit and in the departments that are running online programs.
Ethics and Challenges of Public Funding in Marketing
00:43:22
Speaker
Okay, in our remaining time, let's be judgmental. And I'll take, ah let's take the, no, let's take the, we're having a lot of debates here in the U.S. about student debt and the cost and where federal financial aid comes from.
00:43:34
Speaker
right, so let me take that point of view. Why should the government be spending this much money on marketing? Why are, you're telling me I'm giving out loans, which effectively end up subsidizing the schools through, you know,
00:43:49
Speaker
Why should we keep spending more and more money that goes into marketing and online education? So I understand why we're spending more, but is that a good thing? Are there limits to it?
00:44:04
Speaker
I want to channel my inner John Katzman here. um Why are we spending taxpayer money to subsidised subsidize Google and Facebook?
00:44:15
Speaker
Why are we subsidizing Google and Facebook? Why? But also why are we subsid? We just talked about the, all these professional staff, why are we paying for more and more marketing? That's not instruction.
00:44:28
Speaker
So there is a legitimate question here about the ah public good side. um So in particular for publicly funded universities, but in the U S because of federal financial aid that essentially becomes everybody.
00:44:44
Speaker
Um, Is that a good thing? Like, where are the limits? I don't think it's a good thing, but I think there are some changes afoot that may actually bring it back, at least reduce it a little bit, if not bring it back into a reasonable one.
00:44:59
Speaker
One is, you know, buried in the in the in the tech news recently was the fact that Google search is going down. um I think driven by you and your wife, Phil. Yeah. um ChatGPT is the way to do search. Yeah.
00:45:12
Speaker
You know, um so that will also take some pressure off some of those Google AdWords and and and sort of things like that. I think AI will eventually play a role in in in helping some of these processes be more efficient and and and and things like that. So I think there are some things that that will spend that spending down, but we've got to get out of that, even though, as um Andrea McConachie said,
00:45:38
Speaker
not all marketing spend is paid media spend, but a substantial part is. So going back to our favorite poster child, Southern New Hampshire, you know, more than a third of their marketing spend is paid media spend just on Google, just on one source.
00:45:52
Speaker
um And so it's, it's substantial. So we've got to sort of figure out a way to sort of do some of that and, and and make it, make it better, but I'm not sure that we have a solution yet.
00:46:04
Speaker
Yeah. I would make two points. I'm not so hopeful that AI will necessarily reduce costs because I think ultimately those costs might just be felt in a different way somewhere else but to to gain the visibility that essentially you're trying to gain via Google, you know whether that's content marketing that gets you on the...
00:46:24
Speaker
you know, the search results or gets you, you know, on there. i So I'm less hopeful on that on that front. But I also think, look, if government's saying, well, look, should our funding be spent on this, then I think they have to do more than just say something. I mean, they have to kind of intervene in some way to make it less...
00:46:47
Speaker
i I think you can't just say, oh, well, look, this is not good that it's spent in this way because it's spent in that way to gain visibility and to gain enrolments. And there might be other ways to reduce costs, but it's an effective way to do that for the programmes that you're offering. So, you know, it's fine to say, look, this this is a problem, but that doesn't go far enough for me. And I'm not... so i'm not advocating for more government interventionism in this kind of thing. But, you know, that has to go hand in hand with something that actually affects a change rather than just saying, we're not happy with this.
Future Changes and AI in Education Marketing
00:47:24
Speaker
I think the for me, the fundamental problem goes and goes back into the comparison with traditional marketing, because I'll add another one. part of what you're paying for is expanded access.
00:47:37
Speaker
If you don't reach students, you're not, we're creating a way for non-traditional students and working adults to expand do lifelong learning, expand access to higher education beyond the traditional 18 to 24.
00:47:52
Speaker
So in my mind, part of what you're paying for is expanded access. And we need to think of it in investment terms. right and as opposed to, hey, we're shifting to online and it's costing more and we're lining people's pockets. I think you're right, Phil, but I want to posit a counter example that I think, and I think the truth lies in between us.
00:48:15
Speaker
um One in 10 people in the United States who have a master's degree in computer science have a degree from Georgia Tech. They do not spend any money on marketing.
00:48:28
Speaker
Yeah, well, but all right, so that gets to my second point. the What we don't want to do is you can't compare it directly to regular marketing spend. That's the fundamental mistake. yeah Then you start making bad moral judgments and you miss the point. You miss the fact that this is what it takes. So don't do that.
00:48:49
Speaker
However, Now you take it as a new discipline of marketing or recruitment for online programs. I do think there needs to be ah some structural improvements.
00:49:02
Speaker
I'm more optimistic. Neil brought us down on AI, but I'm more optimistic that there are some opportunities to fundamentally change things there. um And I'm not saying it will automatically happen, but we need to have limits on the spend on marketing.
00:49:16
Speaker
And it is a problem that the AdWords auction markets for Google, Facebook, LinkedIn keep going up, that schools or departments are competing with each other. I think there's a bad side, but don't oops sorry don't compare it to traditional. Look at it as its own discipline and say, and here's what we're paying for.
00:49:39
Speaker
And here's where we need improvements. And here are limits when it comes to public policy. heard a story once years ago, which is probably apocryphal, but when when they created none of it, they had to come up with a name in Canada for the rest of it.
00:49:51
Speaker
And so they held a poll and the two top entries were the rest of it and Fred. So I think we should call this new discipline Fred. Fred, that's right.
00:50:02
Speaker
Fred Market. That's our new campaign. Fred, yeah. How much do you spend on f Fred? Yeah. hey Well,
Episode Wrap-up and Future Discussions
00:50:08
Speaker
this has been great. I've enjoyed—I don't know how it is for listeners or viewers, but I've enjoyed this conversation, and I think it's exposing a lot of the topics that get covered But once you focus on the marketing side, it really gets it out in public.
00:50:24
Speaker
Who knows? We might have a third episode on this topic that we need to follow up on. So thanks. It's great seeing you all. And look forward to seeing you in just ah less than two months in person in Leeds.
00:50:39
Speaker
And ah thank you for all of our viewers and listeners.