What the Wall Street Journal Got Right…and Wrong

by wandah on September 6th, 2012
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In their August 15 Wall Street Journal article “Marketing Pros: Big Brand on Campus,” Emily Glazer and Melissa Korn highlighted the emergence of chief marketing officers on college campuses (It should be divulged here that Teri Lucie Thompson of Purdue University was used as an example in the article, and that Purdue is one of our clients.) The authors began the article by stating that “schools are getting the message about messaging,” but allude to the idea that this increasing interest in marketing is primarily due to the increasing cost of tuition. The article implies that schools turn to marketing under pressure as they are on the defensive about their costs. While it is certainly true that the rising cost of tuition is a problem and demonstrating the value of college degree is important, the article oversimplifies the issue.

It is not uncommon for those in the field of marketing higher education to hear some of the criticisms levied toward the industry and mirrored in this article:

  • “Schools blur the line between academia and the corporate world…”
  • “Schools…are focusing on sales rather than intellectual capital,”
  • “Executives…are just the latest symptom of bloat in college administration.”

These perceptions are really reinforced if you read the comments made by readers of the article.

The problem with the article is that it spends the first two thirds of its content focusing on the criticism of marketing’s role in higher education before it gets around to mentioning that it is a “competitive, cluttered marketplace.”

Furthermore, the article gives voice to the idea that “young adults should not go to college at all” and my favorite quote, “if you need large marketing budgets, it suggests that something has gone wrong with the substance of the product…how many nonprofits spend this type of money on marketing?”

While college is not for everyone and some majors obviously provide higher paying jobs than others, it is hard to ignore the most recent statistics on the value of a college degree. Georgetown University recently published a study that found that, on average, a four-year college graduate earns 84% more than a high school graduate. Further, “people with an associate degree earned less than those with a B.A., on average. The difference is about $500,000 to $600,000 throughout a career. Over the course of a lifetime, a college degree is worth an extra $1 million in earnings … (over a high school diploma).” So maybe college is a good financial investment after all.

Any tier-one research institution, like Purdue in the article, competes for students on a national and international level. Compare the budgets of marketing for colleges and universities competing on this plane with corporations that do the same, or even non-profits that are national in scope. The average university spends less than 1% of their budget on marketing (which by the way is the same average for non-profits).  The average in the business sector ranges from 4-10% depending on what source you use. For-profit universities spend up to 23%. Not quite the same. Also, what do you think the marketing budget might be for national non-profit campaigns like “Got Milk”, the United Way or the American Cancer Society.

Despite what was reported in the Wall Street Journal, the American Marketing Association’s Symposium for the Marketing of Higher Education did not begin in 2001. The Symposium first took place in 1989, sponsored by Xavier University, then co-sponsored by AMA beginning in 1991 and residing with AMA ever since. It is not a new thing, but rather developed more than 20 years ago in response to the changing competitive market.  There was already a growing understanding of the shifts in the marketplace and what tools may be needed to survive and thrive.

It is a “cluttered competitive marketplace.” The recently published “Almanac of Higher Education” by the Chronicle of Higher Education reports that there are 3,418 public and private universities offering anywhere from an associate degree to a doctorate. In addition, there are another 1,216 for-profit institutions competing in the same arenas.

At the same time, the number of potential college-age students will continue to decline across the nation until the year 2015 (Western Interstate Commission for Higher Education, WICHE), and the number of Hispanic and Asian students is growing rapidly in place of a declining white population. The biggest hit in the number of potential, traditional-age students is in the Midwest and Northeast, where the potential market is predicted to decline by 10%. (As an interesting side note, 55% of private universities and colleges are in these same geographic markets.) There are more schools competing for fewer students.

Competition across state lines for students is also well chronicled. In particular, as state schools have their budgets cut, they are looking for additional sources of revenue, which means the state next door or the international student. Higher paying, out-of-state students are becoming more and more attractive as a means to remain financially sound.

As we compete for students, resources and reputation in an increasingly competitive marketplace, marketing is one tool among many that is necessary for colleges and universities to use as they navigate the future. Sound finance, strong HR (think quality faculty and staff), good use of physical resources and technology are all part of the equation.

Why are chief marketing officers on the rise? How about because the level of competition is rapidly increasing and that marketing, as demonstrated in this article, is misunderstood and underappreciated by many on campus (although as the article stated, this is changing). The skill set is often found outside the academy where the competition and its impact are better understood.

It is important to note that every organization that wants to distinguish itself from the competition, ensure it is relevant to its constituents, or make sure it is visible to those who might be interested in what it’s doing or what it is offering, needs to understand and practice effective marketing. This is true if you are a for-profit, a non-profit, a NGO, a political candidate or a university. For many years colleges did zero marketing believing in the adage “if you build it, they will come.” The reality is, this only happens in the movies.