The Misunderstood Importance of For-Profit Education Lead Quality

There has been a large, visible shift recently in the marketing of for-profit colleges that has resulted in several interesting observations. The perfect storm began when (1) the recession started; (2) Obama was elected to office; and (3) a flood of affiliates entered the edu lead gen space.

The Recession

First came the economic downturn in 2008 where unemployment rates significantly increased and as peoples’ job searches didn’t result in new jobs they needed alternatives. One of the more popular alternatives to surface was going back to school.

Online colleges quickly picked up on their opportunity to strike and began marketing to the unemployed, stay-at-home moms and those looking to take part time classes while they held part time jobs.

The pitch was to get an education while no one is hiring so when the economy bounces back they will be better educated and in a position to earn more money.

Obama Gets Elected

Part 2 of the perfect storm was Obama entering office and talk of the elusive “Obama stimulus money“. This allowed for an added spin to the marketing and advertising of online colleges that tied in getting “Obama’s stimulus money”. Example here:

Getting Obama’s stimulus money sounds great in theory but what is it?

In reality Obama’s stimulus money is little more than being eligible to receive Federal Government aid through a grant (if you’re lucky) or a loan (if you’re unlucky).

Affiliates Enter Education Lead Gen

As the above two events were aligning, credit card processors began cracking down on a billing practice called continuity billing. The crack down significantly wiped out the same continuity offers that turned affiliates and affiliate networks into overnight millionaires and left them searching for the next big industry to get in on.

Education lead gen was it.

For-Profit Education Lead Quality

Historically the for-profit college industry was run and marketed by university industry professionals. People who had years of hands-on experience working at campus or online colleges would start auxiliary businesses associated with for-profit schools but they truly understood what drove the schools’ profits and losses.

These are people who know that a good education lead is worth $40+ for a simple lead submission of a person’s name, address, email and education background. These are people who also know that a college must be able to take that valid user data and convert it at a 4% enrollment rate.

An affiliate’s mentality is to get a conversion by any means necessary.

As these worlds collide, an interesting dynamic plays out. Affiliates are now running education offers at $35+ payouts with their “get a lead by any means  necessary” mentality while schools must still convert that data into enrollment rates of around 4%.

At first glance things seem win win for everyone – schools get a flood of leads and affiliates get huge payouts for a fairly simple lead.

Here is the result:

Conclusion

Smart marketers look for new angles to market old products and that is exactly what is happening here. Fortunately for new marketers, they are still able to get high payouts for simple lead gen forms but as we see more and more “$70 Billion grants”, “Become a Cop”, and “Get a $1,000 Scholarship” ads lead quality gets dramatically diluted and payouts will continue to drop.

What started as a $35+ CPA (to affiliates) for a straightforward education lead has dwindled to ~$11 for a niche career landing page (see cop example) and ~$4 for a soft incent scholarship landing page (see above example ad).

Steps are being taken by colleges and AOR’s (agency of record) to combat these types of ads by having their final submit pages strictly emphasize that the user is submitting their information to get contacted by a school. This is most likely the best happy median we have for now.

The more affiliates understand that yes a lead is a lead but at the end of road an education lead must back out to a 4% enrollment rate, the better the long term relation will be between affiliates and for-profit colleges.

Tagged as: affiliate edu leads, education leads, for profit colleges