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What Goes Around… Comes Around

Bob Brock
President

You may have noticed an uptick in college and university marketing over the last few months. Maybe you’ve even been asked to increase marketing levels at your own institution.

Marketing campaigns either being developed or already underway, along with conversations with marketing colleagues across the country, leave little doubt that colleges and universities are becoming much more ad-aggressive than they have been in quite some time. We’re seeing more pervasive interest in brand marketing today than we’ve experienced for at least seven or eight years.

Three factors have combined to once again bring marketing issues top-of-mind for college leadership:

1.  Market contraction

A market contraction has been underway since 2007 when high school graduates began an 8-year decline. This is an important short-term trend that has been largely overshadowed by other concerns such as rising costs, the poor economy, and politics. Between 2007 and 2015, though, the annual number of high school grads will have decreased about 4.5%, according to the Western Interstate Commission on Higher Education (WICHE).

US High School Graduates Graph

The impact of this contraction varies strongly from state to state, but only a few states, mostly in the south and the west, have experienced growth in student prospects during recent years. For most, the situation has been more difficult. Resulting in five years in which (and several more to go) colleges and universities have had to increase market share or expand to new markets just to keep enrollment “above water.”

2.    Recessionary cuts

Adding insult to injury, this market contraction has coincided with the country’s plunge into the deepest, most stubborn economic recession in decades. With reductions in income across all revenue streams, college leaders have been pressured by faculty members as well as beancounters to cut “discretionary” marketing expenditures just when they were needed most. And cut they did, in a big way. Reductions of 20-30% in marketing expenditures have not been unusual during the last five years. Most of these came as “below the line” (non-salary) cuts or strategic delays in filling vacant communications positions, but a number of institutions even resorted to eliminating marketing positions entirely.

3.    Increased competition

And while the overall pie has been shrinking, the number of hungry competitors pushing to the table to grab their slice has increased.  For-profit institutions have grown steadily in size and stature while public and private not-for-profits have launched a flurry of initiatives to capitalize on growing interest in online programs.

So the net-net is that many colleges and universities face the alarming predicament of flat or declining enrollments despite the fact that they have increased their discount rates and/or opened their acceptance windows just to keep the numbers in the plus column.

This rock-and-a-hard-place situation makes for particularly trying times in higher education.  As this blog has noted before, colleges typically operate on a “continuous growth” economic model in which perpetual enrollment increases are required to fund future (sometimes even current) financial commitments. Most institutions just are not structured to be economically stable without year-to-year enrollment growth.

At the same time, higher education is reactionary, not known for being strategically proactive and forward-thinking.  As a result, building awareness and institutional brand reputation becomes a priority only after the lack of doing so has caused problems.

But with stark numbers facing enrollment managers, marketing is a priority and current levels might raise some eyebrows. Based on EMG’s research, in the highly competitive Virginia-Washington, D.C. marketplace, more than 100 institutions of higher education invested more than $27 million in paid advertising during the past 12 months alone!  The top ad-buying institution (surprising hint: this is a non-profit public university) bought more than $6 million in the Washington, D.C. market.  Several dozen – including both for-profit and non-profit institutions – invested $150K to $500K, with a dozen more pumping in at the $500K to $1 million level.

Surprised?  Just look at the Midwest:  In Indiana, another competitive state, 192 colleges and universities invested more than $5 million in the Indianapolis demographic market area (DMA) alone just during the first 6 months of 2012! Among them:  a private, non-profit university that spent more than $882,000 in the first half of the year, another  public non-profit invested $300,000, and more than a dozen non-profits bought more than $150K each.

Let’s be clear: Not every institution advertises just because they’re facing problems. In fact, wise leaders advertise during good times and bad to sustain their brand reputations, cement their market positions, and grow market share.

But many colleges are jumping into marketing to mitigate enrollment loses.  And winners and losers in difficult times are predictable based on a characteristic that has nothing at all to do with size, tuition level, or profit/non-profit status.  What makes the difference is the ultimate motivator for a strong brand marketing effort, as noted here before – your relative market position:

Brands with the strongest market positions (top one or two positions) in their markets and categories are the first to benefit from market expansions and the last to feel the impact of market downturns.

Weak brands, just the opposite. In the current double-whammy-contraction-with-recession scenario, brands with weaker market positions have had to scramble.  Hence a sudden renewed interest in marketing, with marketing units facing the daunting task of digging out of the hole of the last few years to fight their way back into the marketing game.

If you are thinking of jumping into marketing waters, several items to consider:

  1. Do your homework: This is not the place to jump in with eyes wide shut. Structure your marketing strategy carefully based on measurable goals, audience data, and competitive knowledge.
  2. Gather resources:  Investing too little wastes both time and money. It has to be enough for impact a crowded, noisy marketplace.  How much depends on the DMA’s you need to penetrate, the desired reach, audiences you need to influence, platforms you intend to use, and current market position.
  3. Buy in flights:  Advertising in short flights (4-6 weeks at a time) during peak decision-making times will generate more impact for each dollar you invest.
  4. Use multiple platforms:  Multi-platform campaigns have much greater impact. Online is a must, and if you have the money, combine it with TV, still a great platform to reach big audiences. If not, web and mobile venues coupled with print, outdoor, malls, transit, or other platforms works well. Don’t forget online college guides, too.
  5. Track responses: Advertising results are measurable, and are essential to demonstrate value and effectiveness.  Make sure you have installed tracking methodology to show impact and results.

We expect marketing expenditures to continue to increase for the next few years as more and more institutions work to increase their market share of contracting prospect pools and restore marketing budgets that had been trimmed back during the worst of the economic recession.

If you’re jumping in, or jumping back in, let us know if you’d like assistance with data compilation, competitor research, strategic planning and buying, or results measurement.  And good luck!

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