Higher Education Enrollment Marketing

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1 Higher Education Enrollment Marketing THE IMPACT OF DISTANCE ON INQUIRY GENERATION CAMPAIGNS: How Custom GeoTargeting Can Produce Efficiencies sparkroom.com

2 Contents Summary... 3 Targeting Students... 3 Inquiry and Conversion Patterns... 4 Inquiry Volume... 4 Conversion Volume... 4 Conversion Rate... 5 Cost Scenarios... 7 Birmingham... 7 Austin... 8 Philadelphia... 9 GeoTargeting Impact Conclusion A Custom GeoTargeting Approach 2

3 Summary Geographically, every market is different. Cities and their surrounding areas vary by population, demographics and transportation. A successful geotargeting approach for one location cannot always be replicated to a second location with equal success. To be effective, higher education marketing initiatives must be tailored specifically to the market of each campus location. A custom geotargeting approach can optimize conversions, conversion rate and cost per conversion. An analysis of eight United States markets 1 reveals patterns of decreasing inquiry volume, conversion volume and conversion rates at increasing distances from campus locations. Markets with relatively large populations, such as Philadelphia and Chicago, tend to have a higher concentration of inquiries and conversions in close proximity to campus locations than smaller markets, such as Columbia, SC, and Birmingham, AL. However, exceptions to these patterns are common. Individual analyses of each market reveal geographic areas to include or exclude for optimal conversionbased results. Custom geotargeting strategies help schools enhance conversion performance and optimize marketing spend. Where Do I Target Potential Students? The goal of finding students to enroll at an institution seems simple. However, achieving this goal can be quite complicated and costly. Expensive marketing plans are worthless if you are not reaching the appropriate audience. A standard geographic approach of marketing campusbased schools is to target potential students within a given distance from the school location. It s common and simple to set up, but might not always be the best way to achieve your marketing goals. Our geographic analysis of inquiries, conversions and cost, indicates that this approach is not always the answer. We examined eight markets using data from Sparkroom Marketing Software 2. The study includes 2012 affiliate marketing data from a variety of schools, focusing on four variables in relation to distance from campus: inquiry volume, conversion volume, conversion rate and cost per conversion. Each market analysis includes marketing data from at least three colleges. Inquiry and Conversion Patterns The eight markets in the analysis show common trends in the relationships between distance and inquiry volume, conversion volume and conversion rate. Inquiry Volume The red line on Chart 1 illustrates the average percent of total inquiries by distance from campus. Across the eight markets, 83% of inquiries came from within 20 miles of campus locations. Chicago at 90% and Philadelphia at 94%, have the highest concentration of inquiries within 20 miles from campus. These are the two most populated markets in the study. 1. Birmingham, AL; Chicago, IL; Cincinnati, OH; Columbia, SC; Philadelphia, PA; Salt Lake City, UT; Nashville, TN; Austin, TX 2. The data in this analysis is comprised of inquiries from external affiliate channels processed by Sparkroom Marketing Software during Because school demand plays a factor in inquiry generation, there is the potential for related bias within the report findings. A Custom GeoTargeting Approach 3

4 Chart % Percent of Inquiries by Distance from Campus Birmingham 60.00% Chicago Percent of Total Inquiries 50.00% 40.00% 30.00% 20.00% 10.00% 9.53% Cincinnati Columbia Philadelphia Salt Lake City Nashville Austin 0.00% Average 010 Miles 1020 Miles 2030 Miles 3040 Miles 4050 Miles 5060 Miles 60+ Miles Distance from Campus Though the degree of inquiry concentration varies across markets, the trend of decreasing inquiry volume at increasing distance from campus is clear and consistent for all eight locations. Conversion volume follows a similar pattern. Conversion Volume With 84% of conversion volume located within 20 miles of campuses in the eight markets, conversions are slightly more concentrated than inquiries. Again, Philadelphia and Chicago top the volume within the 20mile category with 98% and 94% of conversions, respectively. A 20mile radius would work well in these markets, because almost all conversion volume is within 20 miles of campus locations. But schools can still do better with a custom plan. All eight markets have a greater share of conversions within 20 miles than inquiries. A look at conversion rates explains why. Chart % Percent of Conversions by Distance from Campus Birmingham Percent of Total Conversions 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 9.53% Chicago Cincinnati Columbia Philadelphia Salt Lake City Nashville Austin 0.00% Average 010 Miles 1020 Miles 2030 Miles 3040 Miles 4050 Miles 5060 Miles 60+ Miles Distance from Campus A Custom GeoTargeting Approach 4

5 Conversion Rate As is the case for inquiry and conversion volume, conversion rates generally decrease as distance from campus increases. The red line on Chart 3 highlights this trend. Conversion rate decreases at an average of 20% from one distance category to the next, up to the 4050 mile category. Chart Conversion Rate by Distance from Campus Birmingham Adjusted Conversion Rate % Chicago Cincinnati Columbia Philadelphia Salt Lake City Nashville Austin 0 Average 010 Miles 1020 Miles 2030 Miles 3040 Miles 4050 Miles 5060 Miles 60+ Miles Distance from Campus The relationship between conversion rate and distance is not nearly as consistent across markets as the two volume relationships. Rates differ dramatically by location and, in most cases, do not gradually decrease. The individual market lines on Chart 3 bounce up and down across distance categories, in contrast to the linear average line. Distance is not the only factor of conversion rates, nor is it the only geographic factor. Variables such as population density, transportation infrastructure and demographic factors impact conversion rates. Deeper analyses of inquiry performance shown on the following pages support the need for a custom geotargeting approach. 3. Conversion rates are adjusted to same scale (average rate =.027) A Custom GeoTargeting Approach 5

6 Map 1 and Map 2 show the inquiry and conversion distributions of Chicago and Austin. The red zip codes of the maps indicate high inquiry volume, yellow and blue areas indicate low volume and the purple dots represent conversions. Chicago s inquiry and conversion volume is clustered near the city center. The far less populated Austin exhibits relatively high inquiry volume and some conversions stretching to the northern and southern edges of the 60mile radius. Map 14 Chicago: 2012 Inquiry Heat Map with Applications Map 2 4 Austin: 2012 Inquiry Heat Map with Applications The inquiry and conversion distribution in Austin differs by direction as distance increases. Thus, a marketing plan targeting a set distance radius is inefficient. For example, the area 55 miles north of Austin has high inquiry and conversion volume. Meanwhile, 55 miles east of the city lacks inquiries and conversions. Such geographic nuances are common. Therefore, individual market analyses are essential to establish geotargeting for marketing campaigns. Map 34 Columbia: 2012 Inquiry Heat Map with Enrollments Map 44 Cincinnati: 2012 Inquiry Heat Map with Enrollments Map 3 and Map 4 display the inquiry and conversion distributions in Columbia and Cincinnati. Though the volume distribution in these markets is not as deviant as that of the Austin market, patterns that could impact marketing plans are present. In Columbia, most of the conversion volume, represented by purple dots, is just north of the city. There are conversions extending from the city on highways to the north, northeast and southeast, but there are no conversions beyond 20 miles southwest of the city down Interstate 20. In Cincinnati, the most concentrated area of inquiry and conversion volume is inside and just north of the city. However, inquiries and conversions spread farther south than they do north, east or west. Again, a set distance radius that assumes volume changes the same in every direction would be an inefficient geotargeting strategy in Columbia and Cincinnati. 4. Maps display a 60mile radius A Custom GeoTargeting Approach 6

7 Cost Scenarios The following examples show how a custom geographic targeting plan optimizes cost and conversion performance. Note that markets vary between three conversion metrics: applications, enrollments and starts. The metric analyzed in each market was chosen based on availability of data, as schools differ in the measures they use and record for conversion evaluation. Each cost analysis shows a radius scenario, two custom geography options and a chart detailing how the potential geotargeting changes would affect inquiry volume, conversion volume, conversion rate and cost per conversion. The Custom Geography 1 option for each market is handselected to eliminate areas with no conversions but keeps inquiry volume cuts to a minimum. The Custom Geography 2 option makes more liberal volume cuts by rejecting all zip codes below a certain conversion rate threshold and, as a result, has a greater positive impact on conversion rate and a greater reduction in cost per conversion than Custom Geography 1. Birmingham Map 6 Map 5 All Data: 30Mile Radius Map 7 Custom Geography 1 Custom Geography 2 5 Chart 4 GEOGRAPHY All Data INQUIRIES STARTS START RATE COST PER START % $2, Mile Radius % % 1.89% 17% $2, % Custom Geography % 392 2% 1.72% 6% $2, % Custom Geography % % 2.41% 50% $1, % An analysis of the Birmingham market yields an average start rate of 1.61% and an average cost per start of $2, Chart 4 provides three geotargeting options that improve these two metrics. The percentages on the right of each measure represent the change between the given scenario and all data. For example, limiting the geotargeting to a 30Mile Radius reduces start volume by 14% but increases start rate by 17%. Each potential geography scenario decreases inquiry and start volume, but increases start rate and decreases cost per start. Custom Geography 1, illustrated on Map 6, is the most conservative option. Start volume decreases by only 2%, while start rate increases by 6% and cost per start sees a $150 reduction. The 30Mile Radius and Custom Geography 2 result in greater decreases in inquiry and conversion volume. They also have more significant improvement on start rate and cost than Custom Geography 1 does. 5. Only includes zip codes with a 1.5% start rate or greater A Custom GeoTargeting Approach 7

8 Austin Map 8 Map 9 Map 10 All Data: 45 & 30Mile Radius Custom Geography 1 Custom Geography 2 7 Chart 5 GEOGRAPHY INQUIRIES APPLICATIONS APPLICATION RATE COST PER APPLICATION All Data % $1, Mile Radius % % 3.10% 15% $1, % 30Mile Radius % % 3.05% 13% $1, % Custom Geography % 736 1% 2.82% 5% $1, % Custom Geography % 704 6% 3.21% 19% $1, % Austin has the most dispersed distribution of inquiries and conversions of any market in the study, as illustrated on Map 8. The 45Mile Radius has a higher application rate and lower cost per application than the 30Mile Radius. The unusual pattern is due to high converting, high volume areas more than 30 miles south and more than 50 miles north of the city. The custom geography options include the faraway strong performing hot spots and, unlike the 45Mile Radius, cut out the areas to the northeast, southeast, west and northwest that do not perform well. Notice that Custom Geography 2 cuts out half as much application volume as the 45Mile Radius while having a greater positive impact on application rate and cost per application. 7. Only includes zip codes with a 1.5% application rate or greater A Custom GeoTargeting Approach 8

9 Philadelphia Map 12 Map 11 All Data: 35Mile Radius Map 13 Custom Geography 1 Custom Geography 27 Chart 6 GEOGRAPHY INQUIRIES ENROLLMENTS ENROLLMENT RATE COST PER ENROLLMENT All Data % $3, Mile Radius % 624 1% 1.31% 3% $2, % Custom Geography % 615 2% 1.38% 9% $2, % Custom Geography % 574 9% 1.59% 26% $2, % Map 11 shows the high concentration of inquiries and enrollments in Philadelphia. The 35Mile Radius reduces enrollment volume by only 1%. Compared to the radius, Custom Geography 1 eliminates only one additional percent of enrollments, with a 6% greater increase in enrollment rate and 5% greater decrease in cost per enrollment. Philadelphia is an example of a market where strategic geotargeting can create significant improvements on rate and cost without large volume cuts. Let s assume a school uses Custom Geography 1 and replaces the 11% of lost inquiry volume with inquiries from the new geography. Based on the model, the 5,234 inquiries will convert at 1.38%. With the same spend as all data, Custom Geography 1 results in 58 more enrollments (72 new enrollments minus 14 enrollments cut out by the new geography). 7. Only includes zip codes with a 1% enrollment rate or greater A Custom GeoTargeting Approach 9

10 The Impact of GeoTargeting Analyses of Birmingham, Philadelphia and Austin display key geographic differences that impact marketing plans and illuminate the need to treat each location individually. Each cost scenario shows how geotargeting improves conversion rates. For some schools, higher conversion rates and lower costs per conversion may outweigh lost conversion volume. However, the cost charts displaying reduced inquiry and conversion totals do not factor in new volume that could replace inquiries rejected by geotargeting. A school that regularly hits caps or can draw from new sources will likely be able to replace volume lost in geocuts with better performing inquiries from higher converting areas. If a school is able to compensate for most or all lost volume when employing strategic geotargeting, it can not only raise conversion rate and decrease cost per conversion, but increase conversions as well. In the previous example of Philadelphia s Custom Geography 1, strategic geotargeting under the assumption that all inquiry volume is replaced creates an 11% increase in conversions. Even if only half of the cut volume is filled, a school would see a 3.5% increase in conversions with a lower total cost and cost per conversion. Conclusion While common geographic patterns of enrollment marketing performance exist, differences that significantly impact campaign success are common. Strategic geotargeting is an essential tool to optimize conversions and cost. To create geotargeting plans for individual campuses, a strong collection of data and a tool or service to analyze the data are required. Sparkroom can provide both. Geographic evaluation is a simple way to boost performance in higher education enrollment marketing campaigns. By evaluating each school location on an individual basis, schools can optimize marketing strategies. The Marketing Analytics team at Sparkroom uses a cutting edge geographic information system (GIS) to analyze marketing performance and generate custom geotargeting initiatives. Sparkroom Marketing Services leverages the powerful Sparkroom Marketing Software database and its expertise in strategic geographic marketing can help schools surpass enrollment goals and efficiently spend marketing dollars A Custom GeoTargeting Approach 10

11 About Sparkroom Sparkroom is the leader in performance marketing for the higher education industry. We provide fully transparent, analyticsbased strategies that are designed to do one thing achieve your enrollment marketing objectives. Sparkroom knows what it takes to attract the right students to your brand while managing recruitment costs. Our superior combination of Marketing Services and industryleading Marketing Software gives schools a competitive advantage, allowing for improved efficiency, higher quality and better conversion rates. Sparkroom Marketing Analytics provides a deep look at how inquiries are performing to allow schools to better understand and optimize their enrollment campaigns while making smarter, performancebased decisions. Sparkroom Marketing Software processes more than one million inquiries each month. Sparkroom Marketing Software is cloudbased and helps marketers grow enrollments while controlling the cost of student acquisition. Sparkroom Marketing Software integrates marketing data, automates marketing processes and provides marketing analytics that drive smarter decisions and a more optimized budget. The Power of Sparkroom Contact your Sparkroom account executive or for more information. sparkroom.com / /2014, 6/2014 A Custom GeoTargeting Approach 11

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