As a former assistant dean of admissions at the Kline School of Law, Drexel University, my world revolved around calculating NTR (net tuition revenue), FTE (full time enrollment) and discount rates for over 20 years. Daily, I interfaced with acronyms to manage my business portfolio and my students.
In my current role as a senior consultant at Converge, my paradigm has shifted to deciphering the true meaning of ROI, CPCs and CTRs in digital campaigns. Still a lot of acronyms, and much like my admissions days, I’m helping our client partners use data to measure the effectiveness of their digital marketing and enrollment efforts.
As a part of my on-boarding process, I’ve spent a lot of quality time with our team learning the ins and outs of digital advertising. Along the way, I’ve asked tons of questions, and taken lots of notes, in order to help colleges and universities tie all of this together. Here are FAQs addressed by one of our digital account managers, John Staak, that I know other enrollment and admissions folks will find extremely helpful.
Before starting any type of ROI calculation, it is important to understand two limitations.
With these limitations in mind, an ROI calculation is fairly simple:
# of enrolled students from digital ads X Avg. revenue per student (tuition and fees for 3 years) = Total Revenue
Digital Ad Spend + Total Campaign Management Costs + Implementation Costs = Total Cost
(Total Revenue – Total Cost) / Total Cost = ROI
Benchmarks for these channels vary greatly as they are influenced by a number of different factors such as the ad channel, region and audience. ROI depends quite a bit on internal admissions tactics and revenue per student from tuition. However, these are some general benchmarks education marketers would expect to see based on data from law programs we have managed:
Keep these benchmarks in mind when reviewing data, and look for opportunities to optimize campaigns if metrics are significantly deviating from the shared benchmarks. At the end of the day, ROI is the only metric that truly matters – all of the other metrics involved in digital advertising like cost-per-click, cost-per-lead and conversion rates are microlevel engagement stats. Breakeven cost-per-lead (CPL) should be the main benchmark used to determine whether or not campaigns are paused or budget reallocated. This metric will give you a benchmark to truly measure profitability.
Low, medium and high ad spend will mean different things in different markets. A $5,000 per month budget will put you in pretty good in shape in Topeka (and might even be too much budget to justify), but that would be an entirely different story in Los Angeles. There is certainly a point of diminishing returns on spend when it comes to lead generation from digital ads, but there is not necessarily a perfectly scientific way to find that point, especially considering the countless variables that affect monthly lead counts (seasonality and recruitment cycles, changes in competitive landscape, audience saturation, optimizations, etc.).
The best way to find the optimal level of spend for your program? Trial and error. Start with a reasonably sized monthly budget given your market, and slowly increase ad spend until you see drastic increases in cost-per-lead. Keep in mind that spend should always be tied to an enrollment objective, and that we recommend starting with a goal for applications and working backwards to determine your budget.
CALCULATING ROI FOR YOUR DIGITAL CAMPAIGNS
A huge shoutout to John and the digital advertising team for these insights into FAQs for digital advertising in higher education. Want more information on determining the ROI of your campaigns? Download our ebook on the real ROI of digital advertising for #highered.
Have more questions about digital advertising? Shoot me a note. I’d be happy to connect and provide more information from our team.