As the saying goes, you need to spend money to make money — that’s just as true for higher education institutions as it is for businesses, especially when it comes to advertising. From public universities and state schools to private institutions and community colleges, all schools must strategically allocate funds for marketing to increase enrollment rates, especially in today’s challenging climate.
Digital marketing can help overcome these conditions and attract applicants from a waning pool of candidates. You just need to figure out how much to earmark for your higher ed marketing budget, and how to use those funds to meet enrollment goals. We’ve got you.
Digital Marketing Channels in Higher Education
Colleges and universities have always marketed to students. In the pre-digital era, outreach efforts included college fairs, billboards, catalogs, brochures, and direct mail. Your institution probably still uses some of these tactics to reach prospective students, but has broadened its marketing strategy to include digital channels to attract today’s generation of digital natives.
When building your higher ed marketing budget, be sure to earmark funds for the following digital channels:
- Website: Odds are your institution already has a website with general information about campus life and student services, program-specific pages, and an online application portal. But is your website working as well as it could? For your website to become an enrollment engine, it has to do more than just share general information — it also needs to be well-designed, easy to use and navigate, and deliver the right messaging at the right time. It’s a tall order, but one you can fill with the insights shared in our higher ed website design blog post.
- Social Media: Students love social media. According to the Pew Research Center’s annual report on teens’ social media usage, YouTube, TikTok, Snapchat, and Instagram are the most widely used platforms amongst teens aged 13–17, at a respective 93%, 63%, 60%, and 59%. But high school students aren’t the only ones on social media — Pew also reports that 84% of adults aged 18–29 and 80% aged 30–49 use social media, making it a powerful channel for connecting with prospective students of all ages and promoting your brand.
- Email Marketing: According to the RNL 2023 E-Expectations Trend Report, email is prospective students’ preferred channel for both contacting schools and receiving information, with many potential applicants more willing to share their email address than any other form of contact information. But with a click-through rate (CTR) of 35.4% — compared to the average of 38.49% across all industries — colleges and universities need to more than just fire off marketing emails in the hopes that recipients will open them and take follow-up action. To maximize your email marketing efforts, improving your CTR and driving traffic to your website, check out our blog post on effective higher email marketing strategies.
- Content Marketing: Whether they’re looking to learn about the college experience in general or your school in particular, prospective students are on a quest for information — and content marketing is the most effective way to aid them in their search. From student spotlights and alumni success stories to how-to guides on how to write a solid application essay or choose the right major, you can create search engine-optimized content that showcases your school and speaks directly to prospective students’ needs. And don’t stop at written content — podcasts, webinars, virtual events, and video content are also great ways to engage and educate potential applicants about your institution.
- Paid Digital Media: Referring back to the RNL E-Expectations Trend Report, 63% of students clicked on a digital ad from a college, which demonstrates that digital media has become an essential channel for student recruitment. Of that 63%, the vast majority went on to visit the school’s website, with many (19%) choosing to follow the school’s social media pages or filling out a form to receive information. We’re certainly no strangers to paid digital media; higher ed institutions shouldn’t be, either. Also known as pay-per-click (PPC) advertising, paid digital media encompasses all types of advertising, including search, display, social, and other channels; its primary aim is to draw traffic to your website and generate leads. When paired with search engine optimization (SEO), it’s the ideal way to nurture would-be students through the enrollment pipeline. You can learn more about how to leverage PPC advertising for higher ed recruitment in this blog post.
For best results, we advise our clients to strategically allocate their higher ed marketing budgets to create a multi-channel marketing strategy.
Four Higher Ed Marketing Regulatory Requirements to Be Aware of
While every college and university should invest in digital marketing, it’s essential that those digital marketing efforts be honest and transparent — especially since the Federal Trade Commission (FTC) requires all institutions to be honest in their advertising.
To effectively allocate your higher ed marketing budget while maintaining regulatory compliance, avoid making false statements or unsubstantiated claims about:
- Financial aid, including offers of scholarships to cover all or part of a course charge, whether the cost of a course is the usual price at the school, and the availability or nature of any financial assistance offered to students
- Graduates’ employability, including that your school has a direct link with organizations or employment agencies that can lead to a job, job market statistics related to how likely graduates are to find jobs after finishing their studies, and the current or future job conditions, compensation, or opportunities in the industry or role students are preparing for
- Faculty and equipment, including the nature, age, and availability of equipment; the qualifications of faculty and other personnel; and the number of staff or availability of faculty
- Credit transfers, including the accreditation of your institution, whether a student may transfer course credits to another institution, and the conditions under which your institution will accept transfer credits earned at another institution
While making exaggerated claims about any of the above might make your school seem more appealing to prospective students, any violations of these rules could have serious consequences. In 2021, the FTC took 70 for-profit higher education institutions to task over misleading marketing, with civil penalties of up to $43,792 per violation. To protect your institution’s reputation and bottom line, make honesty your best digital marketing policy.
How Much Do Colleges & Universities Spend on Marketing?
You know you need a higher education marketing budget — but how much should you spend? Here are a few industry averages that should help give you a ballpark estimate of much to allocate for your higher ed advertising program:
- According to a Statista survey of CMOs from higher ed institutions across the U.S., the mean marketing budget for masters degree programs reached $1.98 million in 2021, while doctoral programs’ marketing budgets neared $5.8 million in 2021.
- The Hechinger Report found that, across the board, universities are making significant investments in digital marketing. In 2019:
Hechinger also reports that colleges collectively spent $2 billion on advertising in 2018, and $2.2 billion in 2019.
- The 2023 CMO Survey, conducted by Deloitte and the American Marketing Association, found that, on average, companies dedicate 53.8% of their marketing budgets to digital marketing, with higher education being one of the biggest digital spends at 75.5%.
- The Brookings Institution found that, in 2017, degree-granting U.S. post-secondary institutions spent roughly $730 million on advertising.
These figures make it clear that in order to attract a dwindling number of prospective students in an already crowded market, institutions need to dedicate their efforts — and their dollars — to digital marketing. It’s important to note, though, that not every college or university needs to funnel millions toward marketing. Even with a conservative budget, smaller schools can achieve digital marketing wins and compete with major institutions by finding their niche within the market and targeting it aggressively.
For more on how much higher education institutions and other businesses are spending, check out our breakdown of marketing and sales budgets by industry.
How Much Do Colleges & Universities Spend on Recruiting Students?
Although there is no industry-wide average cost per student in higher ed recruitment, a bit of quick math can help you get an idea of how much your competitors are spending on marketing. For example, we mentioned that SNHU spent $144 million on marketing in 2019. For the academic year 2020–2021, the school had roughly 145,000 enrolled students — about 10,000 more than the prior year. Based on these figures, we can estimate that SNHU spent approximately $14,400 per new student.
SNHU’s spending is noteworthy amongst both for-profit and nonprofit institutions; however, you can apply this formula to any of your competitors to see how much they spend and plan your own marketing budget accordingly.
The ROI of Higher Education Advertising
When calculating the ROI of digital marketing for our higher ed clients, we start with a simple question: What is each student worth to your institution?
Every student has a dollar figure attached to them based on the various expenses they incur for things such as tuition, housing, meal plans, textbooks, and so on. These expenses will vary depending on the type of program they’re enrolled in, the length of that program, and whether they’re on- or off-campus. By determining the average spend for students in each of these programs, you can start to see the ROI of your digital marketing efforts.
Here’s an example: Let’s say you invest $10,000 in a digital marketing initiative to support your university’s undergraduate degree program. That $10,000 is distributed across a variety of campaigns, including paid digital advertising, email marketing, search engine-optimized content, and videos for social media. This initiative entices 100 prospective students to visit your admissions page; 20 of them submit an application, giving you a conversion rate of 20%. Based on these figures, your cost per acquisition would be $500 per applicant.
Now, let’s say that of the 20 who applied, 10 students actually enrolled. If the average tuition and fees for your university’s four-year undergrad degree program were $30,000, with an additional $10,000 for books, housing, and miscellaneous expenses, a single student’s total spending would amount to $40,000 per year. Multiply that by four years, and each student has an average lifetime value of $160,000. Based on these figures, you can see that for every dollar your university spends on digital marketing, you generate $16 in revenue — an ROI of 1600%.
But you can get even more granular when calculating potential ROI by using existing information about your institution’s funnel process — such as your total number of leads per year, applicants per year, and enrollments per year — to create estimates of value per lead, value per request for information, value per application, and so on. Once you’ve determined how much each of these are worth, you can start to determine the ROI of individual digital marketing activities.
The ROI for some activities are especially easy to calculate. For example, paid digital media advertising assigns a specific dollar amount to a specific number of leads, enabling you to see how much you spent running each campaign and how many students were in each stage of the enrollment funnel. Over time, you can see how many students enrolled through PPC campaigns to get a firm ROI; you can then apply this to various campaigns, tracking their progress and determining the overall ROI of your marketing efforts.
This information is incredibly valuable when setting ROI goals for different channels, as it enables you to work backwards and determine which digital marketing initiatives deliver the greatest returns, so you can allocate your higher education advertising budget more strategically.
How Should Higher Education Institutions Allocate Their Marketing Budget?
Let’s do a quick recap: You now have a high-level understanding of the different digital marketing channels, know the average marketing spend of various universities, and have learned how to calculate the ROI of your digital marketing initiatives. But how do you know which channels or initiatives to invest in, let alone how much to spend on each one?
There’s no one-size-fits-all answer to this question, but there are a few things we’d recommend to help you start planning:
- Use enrollment goals as your compass. Whether you’re putting together a digital marketing budget for your entire school or for a specific degree program, figure out how many students you’d need to enroll to meet your revenue goals or ensure that your degree program is viable. Once you have that target number, work backwards. Borrowing the figures from our ROI example, let’s say your goal is to enroll 10 students. Based on industry standards, your school’s performance, past marketing campaigns, and your normal application-to-deposit ratio, you know you need at least 20 applicants to achieve that goal. From there, you’d determine how many leads you’ll need to secure 20 applications (which, based on the example, we know to be at least 100 leads). This should give you a better target when developing your digital marketing strategy and distributing your spending across different campaigns.
- Look to past campaigns for valuable insights. If you’ve run successful digital marketing campaigns in the past, it’s worth reviewing these campaigns to see how much you spent on them. You can use this information to create a budget range for any future campaigns that will leverage similar strategies and share similar goals.
- Create dedicated budgets for different degree programs and offerings. These budgets should vary by program, and you should determine the appropriate cost per student investment for each one based on their expected returns. For example, your higher ed marketing budget per student for a 10-week certification program should be lower than that of a four-year undergraduate degree program, since the certification program will have a lower ROI. These dedicated budgets will not only help you spend your money wisely, but will also make it easier to gauge the progress of your digital marketing initiatives.
To make things even easier, we’ve created a marketing budget template that breaks everything down into categories and includes all the formulas you need to calculate your balance each month. You can access your free copy here.
5 Tips for Colleges & Universities to Maximize ROI
To get the most mileage out of your university marketing budget and generate the greatest possible ROI, try the following:
1. Measure the full enrollment funnel. Not only that, but measure the ratios at each step of the funnel, and any attribution related to that. Some key ratios to keep track of:
- Web-traffic-to-request-information conversion ratio
- Request-information conversion to enrollment advisor call/appointment ratio
- Enrollment advisor call/appointment to-application-start ratio
- Application-start-to-application-finish ratio
- Application-finish-to-application-accepted ratio
- Application-accepted-to-enrolled-student ratio
Though you may assign different names to these ratios, each one is essential to measuring your digital marketing efforts and determining which strategies or initiatives are most cost-effective. It can also help you identify which parts of the enrollment funnel you excel at, and which ones require additional support. Measuring your full enrollment funnel and the ratios within it will help you engage in continuous improvement, ensuring that you make the most of your budget.
2. Measure results by marketing source. After mapping out and measuring your enrollment funnel, narrow your focus to the different sources within that funnel to find out how they perform. A sophisticated marketing operation should be able to measure and reporting on marketing contributions to each funnel phase, such as:
- Number of “request information” conversions generated by Google Ads
- Number of enrollment advising appointments generated by Google Ads
- Number of applications generated by Google Ads
- Number of applications generated by Google Ads
- Number of enrolled students generated by Google Ads
Repeat this measurement across other sources, such as SEO, email, campaigns, sponsorships, and so on.
3. Conduct in-depth competitor analysis. You can learn a surprising amount from competing institutions, including how they allocate their budgets, what their strengths and weaknesses are, and how you can differentiate your school.
4. Learn more about your target audience. Interview potential applicants, current students, and alumni to see what messaging resonates most with prospective students, where they spend their time, what they’re looking for in a degree program or school, and what their primary concerns are. You can use this information to develop buyer personas and targeted content that’s more likely to generate interest and engagement — and, in the long term, leads. You don’t even need to start from scratch: Our downloadable template can streamline the buyer persona creation process.
5. Find your point of view. If there’s one thing the Vital team has learned from working with higher ed institutions of all sizes, it’s that small or mid-sized colleges don’t need to break the bank to compete with large universities. The key is to determine what your differentiated point of view is, and to then build your brand positioning and marketing strategy around it.
Is there something your school or degree program offers that others don’t? If so, make that the focal point of your digital marketing campaigns, crafting compelling messaging that convinces your audience of its value. Is there a particular persona within your target audience that other institutions overlook, such as parents or high school counselors? Try creating content that speaks specifically to their needs, pain points, and preferences. Essentially, what makes your programs different from those offered by other schools, and how can you speak to that?
More often than not, digital marketing is less about how much you’re able to spend, and more about how strategically you position yourself.
6. Prioritize program-specific advertising. While it’s important to raise brand awareness for your entire university, institution-wide marketing campaigns won’t increase enrollment rates for individual degree programs as successfully as program-specific advertising. This is especially true for newer degree programs, which typically require additional digital marketing support (and spend) to get off the ground.
If your school is launching a new degree program or has set aggressive enrollment goals for an existing program, dedicate your efforts to reaching prospective students within that target audience. Create messaging that speaks to their particular needs and interests and highlight your program’s strengths and opportunities. This targeted approach will put your dollars more effectively and lead to greater returns on your cost per student investment.
Want to find your niche and make your marketing dollars work for you? Vital specializes in helping higher ed institutions turn their online presence into enrollment engines, so they can focus on what they do best — setting their students up for success. Talk to a member of our team today to learn more.