Tag: Finances

Amid this firestorm, UAGC’s enrollments continue to slip.

Zak argued this decline “was expected and planned for during the transitional period” as the institution works to integrate the former Ashford into the University of Arizona. He said UAGC is trying to lift enrollment, including through programs that help stopped out students return to college.

Still, the enrollment downturn raises questions in particular about the efficiency of its marketing efforts.

While the analysis doesn’t reveal the full extent of UAGC’s marketing splurge, it likely devotes hundreds of millions of dollars to it, based on figures in the EY audit. A similar institution to UAGC, the University of Maryland Global Campus, also dropped $500 million on just two six-year advertising contracts, according to a separate audit.

UAGC is investing significantly in lead generation, a strategy colleges have tried for more than a decade. They pay for advertisements to appear on webpages, particularly social media platforms, that typically summarize a program and also try to entice prospective students to click a new link for more information.

That ad takes prospects to a separate webpage, where they can fill in their name and other information, becoming a “lead” that a college can try to convince them to enroll.

Yet UAGC’s use of lead generation has been astonishingly fruitless, the audit shows.

Fewer than 1% of students reached through UAGC’s top five paid marketing sources, including Google and Facebook, actually enroll. The numbers concerning Facebook are particularly bleak — only 0.5% of prospective students end up enrolling at UAGC after clicking an advertisement on the platform. The auditor said this means it effectively costs the university more than $34,000 in marketing dollars just for one person to enroll from Facebook.

Even UAGC’s most successful lead generation source — Google search ads — converted just 3% of prospects, with each enrollment costing more than $7,500.

These figures are even more staggering considering UAGC pays to find 85% of its prospects, according to the audit. By contrast, Arizona Online — the university’s self-created online program, which still operates, in parallel to UAGC — buys just 50% of its student leads.

Zak said that UAGC has since “refined” its marketing to “prioritize efficiency and effectiveness,” but did not go into greater detail.

“UAGC has implemented a targeted approach in alignment with its mission of serving non-traditional learners,” Zak said. “UAGC is focused on retention and success and focuses on students who are most likely to benefit from a flexible and supportive learning environment. UAGC leverages data analytics, audience segmentation, and advanced tracking mechanisms to help improve conversion rates and reduce marketing costs.”

He later said that UAGC serves nontraditional students like working adults, military members and first-generation college attendees.

“Reaching those students in a competitive marketplace requires a different approach than traditional four-year universities,” Zak said.

The University of Arizona has faced budget problems broadly and last year said it had a $177 million budget deficit, which it has since reduced significantly.

But for all the university’s publicity efforts around UAGC, prospective students recognize Arizona Online as part of the institution’s brand, more so than UAGC, the audit said. Maintaining both platforms has actually spurred “market confusion,” according to the audit.

To remedy this, the University of Arizona has angled to integrate UAGC and Arizona Online, and Zak pointed to a university statement last year that said the audit findings validate this merger.

Still, this “confusion” underscores broader marketing challenges, like relying heavily on lead generation, a strategy UAGC has leaned into despite the fact that experts have said it’s inefficient to boost enrollment.

In part, that’s because institutions don’t recognize that students won’t make life-altering choices, like where to attend college, based on what’s essentially a pop-up ad, two marketing experts wrote in a 2022 essay.

“Prospective students prudently take their time researching your programs’ offerings in addition to many others,’” they wrote. “They are not naïve, impatient or easily persuaded by glitzy ads and copy. They spend many months researching and deliberating.”

Worse, lead generation can be used for nefarious or even predatory recruitment efforts. Some lead generation companies, for instance, have caught consequences from the Federal Trade Commission, particularly those that target current and former military members.