Insights — Creating Program-Based Marketing Budgets to Ensure Accuracy and Equity

Creating Program-Based Marketing Budgets to Ensure Accuracy and Equity

Resources , Thought leadership / September 12, 2017

Generally speaking, choosing a framework for developing a marketing budget is the ultimate exercise in navigating higher-ed politics and bureaucracy. And if you want (or more likely, need) to allocate by program, the task becomes that much more complex. There’s no perfect way to do it; as Bill Campbell, Vice President of Marketing & Communications at Chatham University, said in April of this year on a Higher Ed Live Podcast, no one model fits every institution.

Higher ed marketing communications offices have been using ROI measures more and more to inform marketing spend, especially with digital marketing analytics so readily available. In simple terms, ROI divides marketing and advertising costs by the total number of inquiries generated to determine cost per inquiry. If you’re trying to determine ROI by program, however, it’s not always a perfect science, since oftentimes programs don’t have dedicated communications budgets but instead share comingled funds with other programs.

So how can colleges and universities create a more comprehensive process for allocating marketing dollars to many programs that are often vastly different in size and scope? At SimpsonScarborough, we recently completed such a project for one institution’s adult and graduate programs. Here’s what we learned.

First, determine institutional priorities. Institutional prioritization is multifaceted and subjective, requiring important yet difficult discussions among senior leadership, department chairs, and the provost.  During these discussions, some programs can and may receive additional marketing dollars if they:

  • align well with the school’s mission or its current strategic plan;
  • have deeper faculty expertise with a notable reputation and/or ranking;
  • have adjunct or full-time professors available for increased course loads;
  • require fewer resources and facilities to administer the program; and
  • have higher program profitability (tuition cost less the cost to administer the program) desired for revenue generation.

Next, assess employment outlook. With the assistance of and approval from academic departments, each academic program is assigned an IPEDS program code, which can be linked to an occupation code within the Bureau of Labor Statistics’ (BLS) Occupational Outlook Handbook. The size of the overall job market, growth or decline in total projected jobs, and the total annual openings by program should inform marketing budget allocation. BLS data alone isn’t enough to inform the budget justifications by program, however, because the data is not real-time data. There are software interfaces available that collect and analyze tens of thousands of current job listings by education, skill, or area of expertise required, and then link that data to academic programs. Both the regional and national employment outlook should inform program marketing budgets.

Finally, track competitor program growth and decline. IPEDs data also can be used to determine market share per program and growth or decline in completions for competitive sets. Calculated projected growth can also inform a program’s potential based on patterns of previous growth. This analysis shows how crowded the “space” is by program and which institutions are dominating market share. Institutions may choose to increase budget allocations for programs where there is limited competition.

One important caveat about IPEDs data: It can misrepresent the marketplace due to inconsistent coding of programs by institutions. A representative from each academic program should review the competitor set, since the departments know their competitors best. Their knowledge helps to ensure the market share calculations are accurate based on a set of IPEDS codes that realistically represent the competitive landscape. The growth or decline of each program nationally is also interesting to consult given the mobility of graduates and the proliferation of online programs.

In closing, when trying to decide how to allocate marketing spend by program, remember there is no definitive formula or data set. However, the more information you can collect to augment the more traditional ROI calculations, the more effective your marketing budgets can be. If institutions inform their budget allocations in part by potential program growth data, there is likely an increased chance at seeing effective results. As always, the more marketing data collected and coded by program, the more optimal the results may be, creating a system of flexible and defensible allocations.

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