A few weeks ago I referenced an analysis put together by InterEd at the end of this post. The link to the presentation is at the end of the post and is worth a second look. It helps argue the fact that the for-profit education industry will play a significant role in educating millions, and at a significant discount when compared to state run schools.

Today, Apollo released a paper that takes a similar approach in defending the for-profit EDU space. The paper titled “Higher Education at a Crossroads” argues that the education goals set by the current Administration are unattainable without for-profit schools.

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Released today was another report revolving around the EDU lead generation space. This report, fortunately, will not send stocks plummeting or law firms scrambling like the GAO report, but instead gives a little insight into the demographics of people filling out lead gen forms.

The study, which was released today, was undertaken by EduDirectReponse and took a closer look into 1000 random generated edu leads. The study took general advertising campaigns (none degree specific messaging) and syndicated the campaigns across multiple channels including SEM, Email, and Display. The campaigns covered the entire United States and produced at least one lead in every State.

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A very interesting study was released by Noel-Levitz that shed light on what high school students are looking for when shopping online for a college or university. It is definitely a must EDU marketers to take a look at.

One thing to note is that 89% these high school students were looking for information on a state college or university and only 4.5% were looking for an online school. I am not sure if the expectations are much different when searching for these two types of schools, but it is notable. Another notable fact prior to reading the results of their survey is that many of the online schools these days simply don’t market to this demographic and typically are focused on prospects older then 25 years old. With that said however, I think there are some very valuable pieces of information in the study that will result, regardless of the users age.

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A few weeks ago we discussed what I believed to be a valid lead. Take a reread of the rant at the link you just passed by to catch yourself up on the topic.

I want to revisit this topic because some lead sellers are taking advantage of very small loophole, the email address. Lets get something clear. Lead Buyers expect a valid lead to be one that can be contacted by phone. In most cases they expect a person to actually pick up the phone and not simply ring and ring and ring and ring, leading to no answer and no voicemail. I have been involved with working leads for about 6 years now and never once would expect to only rely on the email address to contact a prospect. Aside from how important email is to nurturing and following up with a lead it is hardly a sufficient means for an initial contact and in many cases a follow up. In fact, I would put money down that if a lead has an invalid phone number it has almost has no chance of being contacted, much less converted, through email.

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There is a lot of talk about educating the consumer and providing the proper content so that they can make informed decisions. In the finance space this content is completely missing from the lead generation process. In the EDU space there is content overload.

The finance space provides very little information about the companies the consumer is being matched with until after the consumer has committed to receiving phone calls from unknown companies. There are a few companies that are changing that process as we speak, but I can continue to make that general statement until it becomes the norm. What the finance space does do well is cap the amount of companies that will contact the consumer. While we all know there are companies that sell their leads more then they claim, we can assume that most legitimate companies are being ethical and responsible with their distribution model.

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Lets get the record straight.

Not everyone can be successful generating leads. As a matter of factual data, most are not successful at generating their own leads at a reasonable cost. Sure anyone can generate leads at a cost. Normally, however, its at a cost that is not sustainable or that is significantly more expensive then simply buying the leads from a lead gen company. I want to be clear though, it IS completely possible to generate your own leads and even do it well.

Now, obviously different marketing channels result in different marketing costs. Email is typically less expensive, but in most cases requires the ability to handle a large amount of leads from large geo target. Paid Search is the easiest to get up and running, but can be very costly. Display is a channel that can very very costly and requires high level of expertise to make work, especially for lead generation. So, why is it that lead generation companies are able to make it work? Because they have the expertise, scale, coverage and possibly multiple sales. It is really that simply.

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There are some interesting things shaping up in the booming for-profit edu space. If you are a regular reader of this blog you will know this is not the first time I have said the EDU space is facing troubled times. Even though this may be the case it doesn’t necessarily mean it doesn’t make sense for lead gen companies to continue their pursuits of market share. It does mean you should be diversified in the space and probably should be looking at partnering with traditional schools as well as for-profit establishments. Okay, aside from my opinions, I came across a great article by Anne Ryman at AZCentral.com that did a great job of encapsulating a number of the issues that the EDU space faces. If you want a quick read on what is going on with the space regarding student loan default rates, possible new marketing regulations and the high costs, the article is a must read.

The traditional schools should be looking at the online space and quickly figuring out how they can take away market share from these schools. It is quite possible for state schools to offer online classes and service more students at lower cost. It won’t be long until enter the market and begin building downward pressure on the enrollment costs of the higher priced for-profit schools.

Here is the article

Defaults on student loans rising

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The fellas at Sparkroom sponsored a benchmarking survey put together by forprofitedu.com, which I believe is run by the founder of CUNet, which just acquired Sparkroom. The report surveyed 102 marketing professionals in the for-profit EDU sector and asked a number general questions that reaffirmed the evident speculations most industry insiders have been making.

The survey found that almost 70% of the respondents plan on increasing their budgets. Not all too surprising being that EDU industry could easily be considered counter cyclical to the economy. People are looking to go about to school to increase their chances of earning more income in today job market. Once the economy begins to improve, not instantaneously, but soon after those same people will remove themselves from the continuing education market. It is also my speculation that many will begin to drop out or end their schooling prior to completing their degrees because of their secure job situations. They simply will not have the need and will find something better to do with their $1k+ per month. Regardless of this speculation, schools are doubling down on the current boom. No brainer there, but they should be cautious and have a close eye on key market indicators. On the same token, and I think I mentioned this before, but if Obama’s efforts continue on to completion and provide funding for citizens looking to go back to school through the state school system, which is making the same strides of bringing classes online, could bring a market turn quicker then expected. So it makes sense that schools are looking to spend more money on leads. They are currently raking in money hand over fist.

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