Are universities spending wisely?

13 May 2019

Last month, The Guardian published details of how much some UK universities spend on marketing. Whilst this drew some inevitable comment from the academic community about a dysfunctional Higher Education system, there was no explanation as to why it is happening, nor any suggested answer to the most obvious question: is this money well spent?

Professor Brown, former Vice-Chancellor of Solent University, is right to suggest that the increasing marketing spend is a consequence of what academics refer to as the “marketisation” of Higher Education – higher education institutions being perceived as competitive businesses that must compete with one another to win the trade of customers, or students in this case.

Growth is a necessary part of business success and therefore a sizeable marketing budget is commonplace for any large organisation as it seeks to attract new business. So, it stands to reason that as competition increases, those institutions battling in the higher education market will need to increase their advertising spend. But there’s much more to it than that.

In the UK, about 60 percent of universities’ income is earned through teaching. Although some of this is government funded, the vast majority comes from student fees. That said, there is no such thing as a ‘typical’ UK university and although, looking at the UK overall, we can comfortably say more than half of institutional income comes from student fees, there are huge variations between institutions.

Universities spending millions on marketing to attract students https://t.co/82PjtlNedn

— The Guardian (@guardian) 2 April 2019

For example, at both Cambridge and Oxford universities, who take first and second place on The Guardian’s UK University league table, tuition fees account for only 15 percent of their income. Moving down the league table to third place, St Andrews takes 41 percent of its income from tuition fees, Loughborough (4^th place) 51 percent, and Durham (5^th place), 54 percent.

The institutions cited in The Guardian’s report are much further down the league table: University of the West of England takes 37^th place, Gloucestershire – 55^th, University of Central Lancashire – 76^th and Middlesex 112^th; tuition fees make up 71 percent, 76 percent, 70 percent and 75 percent of their income respectively. So, whilst the likes of Oxford and Cambridge can rest assured that their financial position will not be impacted by a dip in student numbers, lower-ranked institutions are reliant on tuition fees to remain financially-solvent.

As such, it stands to reason that these universities that heavily rely on student recruitment as a means of finance are choosing to spend on marketing. Ultimately, they are seeking to recruit as many students as possible to maximise this income stream. So of course, it’s money well spent.

Or is it? These are testing times for UK universities who are facing significant financial challenges -while the pool of 18-year-old potential students is smaller than it has historically ever been. Is spending money to maximise recruitment a good investment?

How do university brands and marketing materials stand out amid a sea of global competition? Source: Shutterstock

It’s a buyers’ market and more often than not, the buyers are poorly informed and faced with a bewildering level of choice. For example, a quick search on UNSTATS shows that students wishing to study business and management have a choice of almost 1,700 courses offered at 149 institutions. Given there are only 165 HE institutions in the UK (HESA), that choice is overwhelming and it’s hard to know where to start filtering the list.

Lucky then, that many students are geographically unaware – especially international applicants. They don’t understand where individual towns and cities are in the UK. If they aren’t sure where an institution is or worse, haven’t heard of it, it’s likely to be ruled out as a possibility fairly early on in the selection process.

That’s why universities are spending money on marketing – to make themselves more widely known and raise their visibility. In a bid to ensure they can be a contender, many universities are spending their marketing budgets to raise their profiles or raise awareness, as marketers call it, driven by the assumption that there is then a greater chance the institution will make it to a student’s short list.

For institutions at the top end of the league tables, their reputation precedes them. They don’t need to spend large sums on raising awareness because they are well-regarded and more importantly, well-known. Providing a student is within reach of their entry requirements, the institutions stand a good chance of being considered because students are already aware of them. And this is another reason why it’s the universities lower down the list that are spending the larger sums of money on marketing – they can’t be confident students are sufficiently aware of the institution for them to be considered.

Watch behind the scenes of our CIM Marketing Excellence award winning campaign – Unleash Your Colours! #university #CIM @S3Advertising pic.twitter.com/II3DMmuQc7

— University of South Wales (@UniSouthWales) 9 May 2019

But in a highly competitive market, simply raising awareness isn’t enough to drive sales; this is not money well spent. If everyone starts to raise their voice to shout hello above the crowd, the general noise level increases and it becomes very difficult to distinguish one voice from another. In these challenging times for universities, marketing spend on awareness is not enough to boost recruitment. To be spending money wisely means moving beyond raising awareness, or shouting hello, and starting to differentiate; shout a clear message about how you are unique and better than the competition.

And this presents a challenge for a market that’s largely homogenous. Universities share a common message – they generally want to be seen as being a centre of excellence for teaching and for developing knowledge because after all, these are two fundamental roles of education providers. And they share a common audience; although students are diverse in their backgrounds, tastes and aspirations, their diversity is familiar to so many institutions.

But for most institutions who don’t have the privilege of gracing the top of league tables, this is a challenge they must rise to and find their clear, distinct message. If they can ensure their marketing budget is spent differentiating themselves to drive recruitment, this will be money well spent.