Last week we spent some time on the phone with a well-known industry short fund.  We discussed the industry as a whole, as well as specific issues facing the industry which were behind their premise that shorting the industry was a good play for the next few years. Topics such as gainful employment, new compensation rules, default rates and the power of non-profit brands extending into the online education were the main points.  Gainful employment in conjunction with 90/10 is in our opinion a biased illogical political move to hinder the growth of one industry segment for profit schools to the benefit of another nonprofit schools.  If the rule is sound & logical, why wouldn’t it

be industry wide, the answer is clear, it’s not a well thought out rule.  If the traditional colleges had to live within gainful employment you would see far fewer lawyers, doctors, economists, political scientists (maybe that’s a good thing) philosophers, literary scholars, teachers, artists, theorists etc.  Who’s going to fill the entry level positions?  Aren’t they stepping stones?  We guess they will be filled by graduates of traditional colleges with English, Liberal Arts & Art history degrees whose $200,000+ education clearly provided them with such a solid and relevant foundation.  Default rates, well they need to be managed, schools need to ensure that the engagement & value their student receive from the education provided them is compelling.  We need to utilize assessment to make sure students enter program they have real interest and a likelihood of success in.  And we need to screen for and provide the remedial assistance necessary for students to be able to be successful in their education.  Will the industry be able to manage them successfully, YES.  As for the value of brands, this is a topic which has been discussed for many years.

We all know a brand is valuable.  We all know having a brand is a huge advantage and can significantly reduce the marketing costs of student recruitment.  But the big caveat is “can”.  Most traditional colleges significantly lack the admissions infrastructure and wiliness to adapt as necessary to be competitive to succeed in the fast paced world of online  education.  The partnerships between traditional colleges and for profit enterprises have proven that they can work and achieve fast growth, but those are still few in number.  The real questions is when will we see an influx of these partnerships, and how much of an effect will they have on the for-profit EDU industry>

Congratulations EducationDynamics!

EducationDynamics was ForProfitEDU.com’s 2011 Education Advertising and Marketing Industry survey “Schools Choice” award winner for Best Lead Provider

ForProfitEDU.com recently completed its annual survey of over 200+ industry professionals and for the first time included a ranking of lead providers.  This year there will be 2 award categories for lead providers:

Schools Choice: The lead provider who achieved the highest overall rankings exclusively from schools.

Industry Choice: The lead Provider(s) who achieved the highest overall rankings cumulatively from schools & advertising firms.

2010 Benchmarking Report provides key statistics and insights for marketers in the education sector

Closter, New Jersey, and Toronto, Canada, February 4, 2010 – Despite continuing challenges to the overall economic environment, marketing budgets in the education sector – specifically for lead generation – are on the rise, according to results from the 2010 Lead Generation Benchmarking survey by ForProfitEDU.com and sponsored by Sparkroom. According to the survey, schools are overwhelmingly keeping their resources focused on lead generation activities for 2010. Virtually all respondents indicated that they are planning to increase or maintain their spending on lead generation next year (69% and 17% respectively). Just 7% plan to decrease spending.

“Marketing, recruitment and admissions departments have faced a number of challenges over the past few years as the market has undergone a series of rapid changes, many as a direct result of online marketing and lead gen technologies,” said Tom Ferrara, CEO of ForProfitEDU.com. “This report offers a quick and concise way for them to gage their performance against other peer schools and to better understand where they should be making changes.”

The survey of 102 professionals directly involved with marketing in the education sector was conducted by iTracks Research on behalf of ForProfitEDU.com between December 1 and December 16, 2009. It aimed to establish some benchmarks and identify current trends and best practices in the highly competitive for-profit education sector.

“There’s more and more pressure on higher education marketers to do more with less as the market becomes increasingly competitive,” said Jamie McDonald, President and CEO of Sparkroom. “This report confirmed what we’ve been seeing – just a small percentage of schools are optimizing their lead management when measured by CPE. The majority need to find ways to improve their enrollment marketing automation in order to compete with the leading marketers in the space.”

Among other findings from the survey:

• There is a strong correlation between 3rd party call center use and short lead response times with, 82% of schools using a third-party call centers reporting lead response time under ten minutes, compared to just 40% using an internal call center, and 45% of those who rely on admissions reps to call.
• The vast majority (90%) of respondents from large schools (those with a total enrolment over 20,000 students) reported that they are using in-house lead management solutions, rather than relying on an agency.
• The effectiveness of social media for lead generation remains unproven, with just 35% of respondents reporting that it is an effective tool for lead gen. By comparison, over 93% of respondents reported that search advertising is very effective.
• When asked about the most significant concerns affecting their organization, the large majority of schools (89%) noted that poor lead quality ranks as a concern, while the majority (58%) also identified the high cost of agency fees as a concern for their organization.

The survey also attracted lead provider respondents who were invited to answer a secondary questionnaire to track trends among lead aggregators, including the number of leads being generated in the education sector, bounceback rates and revenue per lead. These reports have been compiled in a separate report, titled 2010 Lead Generation Benchmarking for Vendors.

For a more detailed interpretation or additional information on either survey, please email info@forprofitedu.com or visit www.ForProfitEDU.com. To request a copy of the 2010 Lead Generation Benchmarking Report, visit www.sparkroom.com/surveyreport.

About ForProfitEDU.com

ForProfitEDU.com is a leading website resource for all those who work within, around or are interested in the For-Profit EDU industry. The site offers research, consulting, networking, news updates and commentary from members of the For-Profit EDU community. Contributors include those from the school side, as well as those that work at related services firms including the investment community (investors, analysts, venture firms & PE firms), marketing & advertising professionals, educators & curriculum development, career services & other related service providers. ForProfitEDU also provides research and consulting services to schools & other service firms within the industry. Areas of expertise include Advertising, Lead generation, Marketing Strategy & Execution, Admissions, M&A, Raising capital, Market research and Partnering to create & grow online schools.

About Sparkroom

Sparkroom delivers innovative solutions to direct marketers, including its comprehensive Lead Performance Management software and services. Sparkroom Lead Deliver, Lead IQ, and Lead Market Analytics deliver a hosted business intelligence platform to give direct response marketers the tools and expertise needed to measure, manage, and optimize their lead acquisition spending across every direct response channel. Sparkroom’s software, which it hosts and delivers to its customers on demand, enables customers to capture, store, and analyze information generated by their lead buying activities and to gain critical business insights into the performance and efficiency of marketing and sales initiatives and other business processes. For more information, visit www.sparkroom.com.

LeadsCon Las Vegas 2010 takes place February 23rd and February 24, 2010. Join for two full days of unforgettable learning and unparalleled networking.

Register: http://www.leadscon.com/leadscon-las-vegas-2010/register.html