-
Russell Mickler, Principal Consultant, has over 17 years of professional experience leading and managing IT organizations.
Online Education Advertising Outpaces Onground 11:1
Written on September 18, 2006
Leave a Comment
|
Again, doing a little research into the perception of online versus onground education, I wanted to look at the differences between marketing spend in both environments. I ran across an interesting article and set of discussions at the Chronical of Higher Education. One particular article did catch my attention concerning the emphasis on advertising spend by for-profit online institutions that exceed traditional non-profit or public institution spending nearly 11:1.
Blumenstyk’s article cites a study performed by Samuel C. Wood, a former assistant professor of business and lecturer at Stanford University, who compared the business model of Apollo (Phoenix University), CEC (AIU University, CTU Online), and ITT Technical Institute to health clubs. The idea is to attract and retain through service subscription.
For-profit institutions have a natural emphasis on advertising. According to Blumenstyk’s article, public and nonprofit colleges spend 1-2 percent of their revenue on advertising whereas for-profit institutions spend 23 percent (Blumenstyk, 2006). This doesn’t suggest that public or non-profit institutions aren’t spending more on advertising (the article indicates that spending on advertising is going up to compete with for-profit visibility), but Woods asserts that nonprofit and public educational systems then dedicate more after-tax revenue “…on instruction and on services and support, a category that typically includes such things as the registrar, cultural and athletics programs, and career counseling.” (Blumenstyk, 2006).
This study had an interesting graphic breakdown of Revenue and Expenses for a nonprofit and for-profit institution:
http://chronicle.com/photos/v52/i35/5235-a35-differences.jpg
I wanted to get the students voice on the influences of advertising on attracting and retaining students within for-profit institutions. I did come up with a number of interesting websites, demonstrating that there was enough passion behind these ideas to demand securing a URL and provisioning web-space for their opinions on somebody’s server.
Disparanging remarks concerning the practices found at the University of Phoenix: http://www.uopsucks.com/
Disparaging remarks concerning the practices found at Capella University: http://www.capellauniversity.org/
A reasonably good discussion on CEC’s AIU program: http://badbusinessbureau.com/reports/ripoff79114.htm
My thinking here was: where’s the blogging from these institutions _promoting_ their services rather than allowing these disparaging voices to be the _only_ voices? In my simple Google search, I found more negative than positive commentary here. If Googling and online advertising can influence student opinion on making a decision, why aren’t either online or onground institutions in this space _promoting_ themselves through viral marketing?
In my brief study, I think there is a connection between visibility and the appeal of what the for-profit institution has to offer the online student. Interestingly enough, in the AIU discussion, there were an equal number of people supporting their experience at AIU as those who were attacking the brand. There is a certain product twist on what the for-profit institutions can offer that speaks well, I think, to the practical problems faced by students today concerning time, money, schedule, and other life-commitments. I’d like to study more how traditional institutions are spending advterising on re-branding themselves to compete with the online competitor – spinning their brand so that they can appear to address the challenges of the new student.
Woods article would seem to suggest that a potential on-ground spin on this problem would be to emphasize the investment in student services, curriculum, administration – rather than on attracting new students to continuously move them through the program. This will be a challenge for non-profit and public institutions, I think. With limited or constrained budgets, the message of traditional institutions could be drowned out, or, they’re likely to redirect large portions of their operating budget to advertising expenses, perhaps diminishing the competitive advantages that Woods articulates in his study.
Maybe traditional institutions would want to create an online “subsidiary” whose brand can be positioned to compete with the for-profit model, whereas the risk to quality and services can be contained? Or, in the least, simple (hardly expensive) explorations into more interpersonal commentary on the students’ experiences that promote the online or onground modality would offer a contrarian opinion to what’s first hit upon in Google.
R
Russell Mickler works a technology consultant in Battle Ground, WA, USA. With over thirteen years of experience, Mickler holds a CISSP, MCSE, a Masters Degree in Information Technology, and is pursuing his Doctorate at Walden University. His website can be found at www.micklerandassociates.com; he can be contacted at mickler@micklerandassociates.com.
May 5, 2006. Blumenstyk, Goldie. “Why For-Profit Colleges Are Like Health Clubs.” The Chronicle of Higher Education. Found on the World Wide Web on September 18, 2006. URL: http://chronicle.com/free/v52/i35/35a03501.htm.