Category Update
For-profit Educators Graduate To Bigger Portfolios
For-profit schools seek brand-building sponsorships as enrollments continue to rise.
10/9/06: Increased competition for students among postsecondary education companies has sponsorship sellers moving to the head of the class.
Apollo Group, Inc., Capella Education Co. and other for-profit educational institutions are using sponsorship as a way to recruit students and differentiate themselves in a crowded field.
Apollo’s online University of Phoenix just signed the category’s largest deal by far: 20-year, $154 million naming rights for the NFL Arizona Cardinals’ stadium in Glendale, Ariz. However, the bulk of for-profit higher education deals are with local and regional properties.
For example, Capella’s online Capella University this year signed first-time sponsorships of Dayton, Ohio’s U.S. Air Force Marathon and the Rite Aid Cleveland Marathon, Half Marathon & 10K.
Johnson & Wales University, a nonprofit “career university” that has a corporate structure and programs of study much closer in nature to for-profit schools than traditional colleges, this year added a partnership with Colorado’s Pueblo Hispanic Education Foundation golf tournament to its roster of properties.
Postsecondary education companies largely target working adults who are not college graduates, offering everything from vocational certificates to doctoral degrees. To a lesser extent, the schools also target recent high school graduates.
The number of students enrolled in degree-granting for-profit colleges has risen nearly threefold–from 304,000 in 1996 to 880,000 in ’04, according to the U.S. Department of Education’s National Center for Education Statistics, which expects postsecondary school enrollment to climb 13 percent from ’04 to ’14.
As evidenced by the sponsorship activity from University of Phoenix and Capella, online education is a key driver of the for-profit segment. Market research firm Eduventures calculates there are approximately 1.2 million full-time online university students, up from 700,000 in ’03. The company expects one in ten college students to be enrolled in an online program by ’08.
Sponsorship activity on behalf of online universities is expected to heat up even more as brick-and-mortar schools enter the online space. In February, Congress changed the requirement that colleges seeking federal aid provide at least half of their classes on a campus. That has prompted a number of universities to roll out online courses.
Sponsorship 101
University of Phoenix, the nation’s largest for-profit university with 230,000 students and $2.25 billion in parent company revenue last year, chose its naming rights deal to elevate its positioning on both a domestic and international scale.
In addition to 10 Cardinals games, University of Phoenix Stadium will serve as the annual site for the Tostitos Fiesta Bowl, and will host the first-ever Bowl Championship Series title game and the Super Bowl in ’08.
The $7.7 million the school will pay annually represents about three percent of Apollo’s reported yearly marketing budget.
University of Phoenix also sponsors a handful of local properties and pro sports teams in its hometown and in markets where it has physical campuses. Such deals include the Phoenix Zoo and the WNBA Sacramento Monarchs. The latter deal affords radio spots and ID on posters distributed to attendees during fan appreciation night.
For its part, Capella University has focused sponsorship on marathons. “There is a consistency in what goes into running a marathon and what it takes to get an advanced degree. We feel it’s a great fit for us and our brand,” said Irene Silber, the company’s director of PR.
The company last month agreed to be presenting sponsor of the Antarctica Marathon and also sponsors the Medtronic
Twin Cities Marathon and the University of Washington Medical Center Seattle Marathon.
Capella leverages sponsorships to engage employees and promote the flexibility of online learning. For example, the three students participating in the Antarctica Marathon next February will take classes during the trip and post blogs about their experience on the company’s Web site.
Providence, R.I.-based Johnson & Wales sponsors to raise awareness. “We use sponsorship to get our name and our brand out there,” said Kim Ostrowski, director of admissions for the school’s Denver campus. “We’re always looking for new ways to attract more students.”
The company, which has campuses in Charlotte, Denver, North Miami and Providence, sponsors a number of community festivals including Earth Day Rhode Island and Charlotte Shout arts festival.
In addition to Apollo and Capella, for-profit education players include Career Education Corp.; Corinthian Colleges, Inc.; DeVry Inc.; Education Management Corp.; ITT Educational Services, Inc.; Lincoln Educational Services Corp.; and Strayer Education, Inc.
Tips On Selling The Postsecondary Education Category
To hit the hot buttons of schools, properties should:
Know who to pitch. Sponsorship decision-making at most of the large for-profit universities is decentralized. Authority for local deals is typically left up to local offices or individual campuses. Admissions departments tend to be the primary point of entry and funding source.
Engage students. Schools are increasingly looking for opportunities to tout the student experience. For example, the University of Phoenix leveraged its Monarchs sponsorship to tout the fact that one of the players took classes at its local campus.
Other schools look for opportunities for students to gain hands-on training. For example, J&W students have worked in a culinary pavilion around the company’s sponsorship of Charlotte Shout.
Highlight good reputation and track record. With some for-profit education companies facing accreditation and regulatory investigations, the category needs to combat the perception that its schools are diploma mills that are more interested in cashing government financial aid checks than in educating students.
Sources
Capella Education Co., Tel: 612/977-5100
Johnson & Wales University, Denver, Tel: 303/256-9300