Online Schools Rewarded for Investing in Marketing & Recruitment over Design & Teaching Quality

Depending upon your experience with the world of online learning, you may not be aware of the immense importance that marketing plays in online higher education today. Allow me to share a simple outline of the current situation, although I am admittedly simplifying things in a way that risks slightly misrepresenting some parts of it. Nonetheless, higher education is a public good and part of the social sector, which I contend calls for a higher level of transparency, accountability, and scrutiny. So, I offer the following points about marketing and recruitment for online programs, along with some questions for us to consider.

  1. A growing number of Universities are embracing online learning, with many targeting fully online students.
  2. This calls for a different type of marketing and recruitment that is not inexpensive.
  3. For-profit models for growth often include significant marketing and enrollment management budgets, 10-30% of the net revenue from tuition. I base this on looking at quarterly reports and public statements from some schools, like this 2013 report from Capella University.  So, for every $10,000,000 collected in tuition, some schools might be spending $1,000,000 – $3,000,000+ to attract new students. This article claims that Apollo group spent $81.3 million on advertising alone in 2013. The same article highlights seven other for-profit higher education institutions spending between $41 million and $10 million on advertising in 2013.
  4. Quite a few Universities partner with outside for-profit companies to help with recruitment and marketing, either paying for the services or engaging in a revenue-sharing approach, allowing the University to avoid upfront financial risks or investments. In return, these companies sometimes get percentages of the tuition. This article references one such partner company that takes 50% of the tuition for the services rendered.
  5. Some calculate the cost of marketing and recruitment on a cost per start basis. How much money does it cost to reach, recruit and start a prospective student in an online program? If there is a high demand program and many online Universities are marketing and recruiting these students, the cost per start can be quite high.
  6. This higher percentage of tuition going to marketing and recruitment is a newer phenomenon in higher education, largely established by for-profit online Universities, but it commonly embraced by other Universities wanting to significantly expand their online enrollment.
  7. As an aside, I accept the reality of this current situation, but higher education marketing and recruitment strategies today can (and I suggest must) be about more than cost per start calculations if we are going to be faithful to the historic mission of higher education.
  8. If more money is now going to marketing and recruitment, what is lost? Where is the money not going? Is it done by using a higher percentage of part-time faculty instead of more expensive full-time faculty? Is it done by continuing to raise the cost of tuition? What about cutting costs for aspects of academics that do not relate directly to student recruitment and/or retention? If we are spending more money on one thing, this means that we are spending less on something else? If marketing is the winner, who or what is the loser in this?
  9. This leaves one to wonder what would happen if all or a large part of that investment went into decreasing the cost of tuition or it was used for research and development about high-impact teaching and learning.
  10. Of course, the reality is that failing to market and recruitment means fewer students, which does not give one the economy of scale to provide other high quality services.
  11. This is an interesting and challenging time for online higher education. There are many “standard practices,” but I suggest that non-standard practices are also an important part of innovation with character, a character that reflects the mission and values of many existing higher education institutions.
  12. This can’t simply be ignored or disregarded for those who are offering online programs. To do so is likely a decision to fail to keep the online academic doors open for an extended period. Instead, it calls for a type of creative, strategic, missional thinking that is largely absent in the history of most higher education institutions. In other words, I argue that the answer is not ignoring the realities of marketing and enrollment management, but going even deeper into them, deep enough to innovate for the sake of each University’s mission, vision, values and goals.
Posted in blog, e-learning, education, higher education

About Bernard Bull

Dr. Bernard Bull is a President of Goddard College, author, podcast host, and blogger. Some of his books include Missional Moonshots: Insights and Inspiration for Educational Innovation, What Really Matters: Ten Critical Issues in Contemporary Education, and Adventures in Self-Directed Learning. He is passionate about futures in education; leaner agency, educational innovation, and social entrepreneurship in education.