March marks the beginning of fiscal year planning for many colleges and universities, which often operate on a July 1st - June 30th fiscal year budgeting cycle.
And this year, whether your organization is embracing a zero-based budgeting process, staying the course with incremental, or dragging departments through an arduous bottoms-up approach, chances are one key question coming up is:
How Much Should We Spend In Marketing?
And while it’s always nice to think you can spend less and yield more, in today’s crowded and complex education market that kind of overly optimistic budgeting isn’t going to do anything but please your Board and bury your team in insurmountable expectation.
But before we run off and masterfully model our way to an aggressive - but achievable - annual plan, it’s worth aligning on the following question first:
When it comes to marketing…
Are We Playing Offense, Defense, Or Riding The Bench?
Much of my career has been shaped by offensive marketing strategies, developed and driven by open access, tuition-dependent institutions with limited existing brand awareness.
With an appetite for ever-elevating acquisition costs, we invested aggressively across digital-based bidding platforms (e.g., Paid Search, Paid Social) and drove increasing volumes of interest in an effort to scale enrollment.
On the flip side, during my two stints at UCLA, I was reminded of the power of a defensive marketing strategy.
Already one of the world’s most popular institutions, our marketing strategy was steeped in a desire to protect what was built through extensive reputation management efforts. And we coupled those activities with a more modest, but thoughtful, marketing effort designed to increase awareness of and affinity in subsidiary components of the brand (e.g., the reach and impact of UCLA Health).
But over the years I also learned of a third strategy far more prevalent than many of us would like to admit…
Offense, Defense, And The Bench
The reality is, while much attention is paid to the big spenders in our space, a significant portion of our population still spends little to nothing meaningful in marketing.
And in a world noisier than ever, where the average consumer experiences up to 10,000 ads a day, relying on an ever-fading word-of-mouth is a surefire way to leave yourself vulnerable to encroaching competition.
Because in a mature, consolidating, and complex market like education the truth is:
If you’re shrinking, the best way to grow is to increase marketing spend and spend into the decline
If you’re growing, the best way to keep growing is to increase marketing spend and increase your cost per acquisition targets
And if you’re already on the top, the best way to maintain position is to increase marketing spend and invest in defense
While numbers are nuanced, and no two institutions are the same, a good dose of reality and a simple rule of thumb to live by when budgeting is:
If You Aren’t Spending At Least A Million Dollars In Marketing, Chances Are You’re Riding The Bench
And to be clear, that’s $1 million in market, incremental to the overhead associated with your internal marketing department.
The reason? Under spending in marketing means you only own your narrative on channels you already own, communicating to populations that already know who you are.
But unlike many other industries, in education past purchase is much less likely to be a predictor of a future one; meaning the majority of prospective students we are striving to reach aren’t the people we can naturally reach on our own.
So if you aren’t investing in marketing to reach them, chances are you aren’t reaching them at all.
Back to Budgeting
This isn’t meant to be doom and gloom, far from it.
Despite the challenges in our space, we’re still seeing many institutions successfully grow, whether that’s in enrollment, reputation, or both.
But if you’re sitting down and just starting to map out your budget for next fiscal year, let me advocate on behalf of your marketing department and suggest you at least consider what an incremental marketing spend could do.
Because chances are, unless you’re one of the few big MegaUs, you may just be underspending the opportunity.
So take another look at what you’re planning and ask yourself…
Are We Playing Offense, Defense, Or Riding The Bench?
Editor’s Note
I’ll be leaving sunny San Diego next week and traveling to D.C. to be part of the UPCEA 2023 Annual Conference. If you, or your institution, will be there please feel free to shoot me a note, as I’d love to meet up.
Seth
About the Author
Seth is the founder and CEO of Kanahoma, a San Diego-based performance marketing agency on a mission to build a better agency for organizations building a better world.
You can learn more about who we are and what we do at www.Kanahoma.com.