Traditional colleges turn to call centers, paying for online ‘leads,’ and other commercial recruiting tactics
After watching the for-profit-college industry blossom by aggressively expanding to online education and catering to adult students over the past decade, many traditional colleges followed suit, enjoying new revenue opportunities and greater exposure as they reached fresh pools of students.
Now a growing number of those nonprofit colleges are adopting the corollary to that approach: If they are going to provide education the way for-profit colleges do, they might as well market themselves that way, too.
Nonprofit institutions like Regis, Indiana Wesleyan, and LeTourneau Universities, along with UMassOnline and New York University, regularly find themselves vying for visibility on Google and Yahoo search pages with the likes of the University of Phoenix and American InterContinental University, institutions that depend heavily on the Internet for recruiting.
Like those Web-savvy institutions, the nonprofit colleges are putting more money and more personnel toward sophisticated recruiting strategies built around "pay per click" advertising campaigns based on keyword searches, spending anywhere from a few cents to $10 or $12 each time a Web user clicks through to their sites after seeing them pop up on the "sponsored links" portion of a search-results page.
The colleges are also spending increased amounts of time with experts who can help them tweak their Web sites so they are more likely to appear high in the rankings in the unpaid, "organic" searches.
For instance, the distance-education M.B.A. offered by Indiana University’s Kelley School of Business usually pops up on the very first page of a Google search for "online M.B.A." That’s no accident. About 18 months ago, the business school revamped its Kelley Direct Web site with the help of an expert in "search-engine optimization" to assure that the site does well in Google searches on that term.
Increasingly, nonprofit colleges are also upping their spending on "pay per lead" deals with online-directory companies and other "lead aggregators" that use their own marketing and search-engine-optimization techniques to gain prominence for their advertisements and URL’s. (A lead, in advertising parlance, is a potential customer.)
Some are even adopting another hallmark of for-profit colleges: arranging to have those leads automatically routed to call centers, either staffed by the college’s own employees or operated off campus by outside companies. The goal is to ensure that the money colleges spend for leads is not wasted because they do not have the personnel readily available to follow up.
"We are starting to behave like some of the for-profits with our marketing initiatives," says Cameron S. Cruickshank, vice president for enrollment management at Tiffin University, an Ohio institution with an enrollment of 1,990 students.
Although little research has been conducted on the relative effectiveness of Internet marketing tactics in higher education, college officials are voting with their budgets. According to several surveys, nonprofit colleges are spending less on traditional tactics like direct mail and catalogs and more for online advertising.
"To compete effectively with the for-profits, they have to use the same techniques," says Steve R. Isaac, director of the Interactive Marketing Institute at Virginia Commonwealth University. "The macro trend" suggests that people will continue to return to college throughout their careers, he notes, and "the Web is a perfect place to search."
Still Small Players
To be sure, for-profit colleges dominate Internet marketing, with the University of Phoenix the uncontested leader of the pack. For the 12 months ending September 30, the university’s parent company, the Apollo Group, was the seventh-biggest online advertiser across all industries, according to statistics compiled for The Chronicle by Nielsen/NetRatings, spending more than Dell computers and General Motors.
The $142-million the Apollo Group spent does not take into account the additional tens of millions it paid for search-engine advertising or amounts spent by companies using the Internet to generate leads on its behalf. Apollo and other for-profit-college companies are also far bigger players in "pay per lead" deals and call-center activity.
But Mr. Isaac contends that nonprofit colleges can fare well by adopting some of the more commercial approaches of the for-profit sector, even if the colleges lack Phoenix’s financial wherewithal. Nonprofit institutions can build on their national and regional reputations, he says. "They have a brand that’s working for them," he says.
Mr. Isaac’s optimism may be colored by his own financial interests. In addition to his adjunct academic position, he is chief executive of Halyard Education Partners, a holding company that owns, among other properties, eLearners.com, a directory site for online courses. But he says his observations are grounded in reality. Although on eLearners.com, he says, the revenue generated from nonprofit colleges is quite small compared with spending by for-profit-college clients, "it’s growing."
Even as nonprofit colleges embrace new approaches, many are recognizing the pitfalls. As the for-profit higher-education industry has already learned – and in part because of its marketing sophistication and financial clout – the new Internet-based marketing strategies are getting costlier and more complex.
For colleges pursuing pay-per-click campaigns, prices for popular keywords like "associate’s degree," "master’s degree," and "business program" on Yahoo have each about doubled in the past two years (to about $11, $7.30, and $6.21, respectively), according to a report this summer by Howard M. Block, a stock analyst with Banc of America Securities.
Mr. Block speculates that Phoenix is responsible for some of that increase because of the aggressive marketing of its two-year Axia College, but he notes that some of the pressure is also coming from other competitors.
The cost per lead is also on the rise. Colleges that once paid $8 to $15 per lead now routinely find themselves paying anywhere from $30 to $60, and sometimes as much as $90.
"It’s a very crowded and competitive space, and the organizations that have a lot of money are the ones that are doing well," says Nan Dawkins, whose company, RedBoots Consulting, in McLean, Va., advises clients on Internet-marketing strategies.
Perhaps of greater significance than the costs, the strategies of marketing on the Web are requiring many colleges to adjust their long-held notions of just what kinds of tactics are appropriate in recruiting students, particularly as companies press colleges to make greater use of call centers to improve the "conversion rate" on the leads they are buying.
"Converting the lead" through telemarketing is standard operating procedure among for-profit colleges. Indeed, the University of Phoenix employs about 4,000 people who spend their days calling prospects to sell them on enrolling. Many of the nonprofit pioneers in online education and national marketing – Regis, in Denver; Peirce College, in Philadelphia; and UMass Online among them – operate their own, much smaller call centers, too.
For many nonprofit colleges, however, the idea is still somewhat foreign, and perhaps even offensive.
"That’s what the nonprofits are wrestling with the most," says Michael Lastoria, chief executive of Innovation Ads, a New York company that is becoming more active in higher-education Internet marketing.
Nonetheless, even that appears to be changing.
Rick Fort, president of Education Sales Management, a call-center company, says that two years ago, nonprofit colleges made up about 5 percent of its clients. Today, he says, about one quarter of his customers are nonprofit colleges, although their business provides a far smaller percentage of his revenue.
Many of the new clients, he says, are being attracted by the "Speed to Lead" service his company now offers, a promise to telephone each prospect within three minutes of the company’s receiving the lead from the college’s Web site or a vendor working on the college’s behalf. "Oftentimes, it’s who gets back to the person the fastest with a quality conversation who will win the day," he says. And for most of the nonprofit colleges, he contends, the volume of leads would not justify their having their own 24-hour call centers.
Indeed, Speed to Lead service was a draw for George Washington University, says Troy M. Teeboom, director of marketing for the university’s College of Professional Studies. He expects most prospects will be impressed rather than put off. "They’ll probably feel, Wow, GW has caught up with the other guys," he says. The college expects to use the company to manage 200 leads a month. Regis University and the Colorado School of Professional Psychology are among other nonprofit institutions that use the service.
A Complicated Landscape
For institutions like George Washington, which until recently had limited its Internet marketing efforts to more "traditional" techniques like paid banner advertisements on newspaper Web sites, the landscape for online lead generation can be a confusing one because of the variety of players and tactics. But in almost every instance, a simple principle applies: Every technique costs money, and the college is directly or indirectly footing the bill.
Colleges acquire Internet leads in any number of ways. The two simplest are organic searches and keyword advertising campaigns that link back to colleges’ Web sites.
They can also hire online-directory sites directly or through advertising agencies to get contact information on prospective students on a "cost per lead" basis. The colleges then leave it to the directories and advertising agencies to deploy marketing campaigns on Google, Yahoo, or their affiliated sites to attract visitors to the directories.
Some directories are self-contained companies. Others are arms of the lead-vendor agencies, like Collegeanduniversity.net, which is owned by CUnet. In either case, the directories list colleges because the institutions are buying leads.
"No one’s doing it out of the goodness of their heart," says Ms. Dawkins, of RedBoots.
The directory sites have been adding more and more nonprofit colleges to their client lists. Greg Titus, chief executive of a lead-vending company called Course Advisor, says at least 50 of the 400 colleges that now list courses on his directory site are nonprofit institutions, among them Boston University and Portland State University, which list master’s- and bachelor’s-degree courses.
The company expects its nonprofit client base to grow considerably, as do its new investors, a private-equity firm and the Washington Post Company, which recently put $12-million into the Wakefield, Mass., company.
Colleges also obtain leads by participating in marketing consortia, like the University Alliance program, operated by Bisk Education, in Tampa, or through partnerships with companies like Compass Knowledge Group, an Orlando, Fla. company partly owned by the University of Florida. It helps colleges to develop, deliver, and market their online programs, and it shares in the tuition revenue.
In both of those cases, the consortium or the commercial partner takes responsibility for acquiring the leads. Both companies also maintain telemarketing divisions to help convert the leads. Compass Knowledge makes a point of calling its 45-person operation an "enrollment center," and says each program it represents has its own team of enrollment advisers.
A Dicey Game
Internet-based marketing is not for the faint of heart. Even colleges that embrace the strategies note that they are rife with complications.
Regis University, for example, sometimes finds it is competing against itself on Internet search sites because it uses University Alliance to advertise and manage its online M.B.A. program, and also pays an agency, QuinStreet, to provide the institution with leads for its other programs.
The companies are frequently more effective in getting the Regis name well displayed on paid and unpaid search-result pages than Regis is itself.
Regis sets aside as much as $20,000 per month for its own pay-per-click campaigns, bidding on search terms like "online accounting degree" and "online bachelor’s degree."
But according to Jerry A. Mosier, director of new-student enrollment for its School for Professional Studies, "it’s often difficult for us to pay enough to come up high enough" on a paid search to outrank companies that are working for Regis with paid searches of their own.
The directory companies often fare better in the unpaid, organic searches as well. In a recent Google search for "Regis University," for example, links to a Regis Web page came up first and second in the organic search, but another of the university’s own links, aimed at transfer students, showed up below three other links created by Bisk, QuinStreet, and ClassesUSA, a directory company.
The directory Web sites fare well in organic searches because they contain generic articles on topics like adjusting to college or getting financial aid. The automated systems that drive Google, Yahoo, and other search engines reward sites with content by displaying them higher on the results page in organic searches.
"Bisk has done a better job; ClassesUSA has done a better job," says Mr. Mosier. "You can imagine how confusing this is to students. And it’s a situation we created."
Jerry Shepherd, assistant vice president for enrollment management at Indiana Wesleyan, says directory sites can lead to other kinds of confusion, particularly for colleges expecting regular exposure. In practice, he notes, if an institution bought a thousand leads, "your ad can appear and disappear in a directory site" depending on how many more leads the company has to provide to other colleges at the same time.
Such situations have not deterred Indiana Wesleyan, which enrolls more than 3,500 students in its online courses along with 2,900 students at its residential campus and about 6,000 more in offsite locations. It now uses about half of its marketing budget on Internet-based strategies; three years ago it was 20 percent. The marketing budget itself is now nearly 4 percent of the institution’s overall budget. That would not scare officials at Apollo or Career Education Corporation, Mr. Shepherd allows. But "it’s an aggressive amount for a not-for-profit Christian institution."
Deceptive Tactics
In some cases, the confusion created by online advertisers is deliberate because some directory sites and affiliated marketers play fast and loose in their quest to generate leads.
Unfortunately, says Mr. Mosier, colleges sometimes do not discover which lead vendors are unscrupulous until after the colleges have hired them.
Earlier this year, Regis began a pilot program with a new vendor. The first lead the company sent was for a 73-year-old retiree in Fort Lauderdale, Fla., who, as one might imagine, had no interest in returning to college at Regis or anywhere else. This "lead" had given his contact information to the vendor in response to a come-on to win a $500 gift card from Target. Regis canceled its deal with the company, which Mr. Mosier declined to name.
Regis now uses four of the biggest vendors for leads and has hired its own full-time Internet-marketing specialist to help manage its lead vendors and pay-per-click campaigns.
With nearly 23,000 students, UMass Online is one of the biggest nonprofit players in distance education, and Colleen Daly, director of marketing, says Internet marketing has helped build that enrollment. "We do have large numbers of students we wouldn’t have reached in any other way," she says. UMassOnline now devotes about 40 percent of its advertising budget to Internet advertising, up from 33 percent a year ago and 25 percent two years ago.
But as UMassOnline discovered about two years ago, another questionable tactic can involve directory companies that trade on a university’s "brand" by bidding on the institution’s name, even when the university is not one of their customers. So, for example, a student uses a search engine to find UMassOnline, and a directory site shows up alongside UMassOnline’s paid and unpaid listings.
"It’s a little touchy," says Ms. Daly. "We’ve asked them not to do that." She declined to identify the company. Some individual colleges, or vendors working on their behalf, employ this tactic as well.
Ms. Daly said situations like that were a problem because they could drive up the college’s own costs of advertising and confuse students who were trying to find out about UMassOnline. "We’re trying to help the consumer try to find the information, not bait and switch them," she says.
Colleges that work with outside companies also risk being represented in ways they don’t like. For Tiffin University, that realization came earlier this fall, after the university had hired a lead vendor to find students for its graduate programs in criminal justice and business. The vendor, CUnet, bid on the Tiffin University name so that a link to its page would come up first among the sponsored links for anyone searching on"Tiffin." The URL for the link, supplied by CUnet, said "TiffinU.com."
Within minutes of seeing it, Mr. Cruickshank, the Tiffin vice president for enrollment, sent an urgent e-mail message to his CUnet account representative and asked him to change the link.
"I don’t want us to be associated as a dot-com," he explains. "That’s one of our competitive advantages." Within a day or so, the suffix "com" had been changed to a "net" in the link.
For all the headaches and the rising costs, nonprofit colleges continue to press ahead with Internet marketing. Ms. Daly, of UMassOnline, says the few analyses her institution has conducted show that the programs are cost-effective.
That also proved true for the School of International Studies at the University of the Pacific, which two years ago invested $4,000 in optimizing its Web site so it would come up higher in organic searches on sites like Yahoo and Google, and another $15,000 or so in pay-per-click campaigns on keywords like "study abroad" and "cross-cultural studies." Margee Ensign, the dean, says that inquiries, applications, and the percentages of admitted students enrolling all increased afterward.
Marketers for the online business program at Indiana University say they too have invested heavily in search-engine marketing because surveys of students who enroll say that is how they found the college in the first place. In addition to its investment in search-engine optimization, Kelley Direct began a keyword campaign on Google in May, spending about $30,000 so far. The sum is about the same amount Kelley pays in design and production for a two-year supply of traditional viewbooks.
A small-scale survey the school recently conducted of its students found that 30 percent of them had learned about its master’s-degree programs by searching on the Internet, outranking all other sources of information.
But even those who have had success with Internet marketing note that it is getting trickier.
competitive and expensive
"It’s both more expensive and less effective because more people are doing it," says Ms. Ensign, of the University of the Pacific. The keyword advertising campaign on Google worked for the university in 2004 and 2005 because "we stood out," she says. "We have not turned the campaign on for six months," she says. Now the college is looking into other strategies, like interactive e-mail and podcasts, to try to reach students.
Indiana Wesleyan is in the same boat. "It’s becoming increasingly difficult to optimize your site to land on the first page," says Mr. Shepherd, the enrollment-management vice president. And that’s not only because other colleges are also investing in optimization strategies but because the search engines themselves continue to change the criteria and procedures that determine which Web sites rank highest.
Like the University of the Pacific, Indiana Wesleyan is exploring other approaches, perhaps including a paid presence on YouTube.
But keeping up with the search-engine methodology and the latest Internet trends takes its toll, Mr. Shepherd says. "It’s a moving target."
This article was taken from the Chronicle of Higher education
By Goldie Blumenstyk