EdTech Europe 2015 [Track 1]: [2U], ([Rob Cohen], [President])
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EdTech Europe 2015 [Track 1]: 2U, Rob Cohen, A Higher Ed Case Study from 2U: what digital marketing has taught us about university brands
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EdTech Europe 2015 [Track 1]: [2U], ([Rob Cohen], [President])
- 1. A Higher-Ed Case Study From 2U: What Digital Marketing has Taught us About University Brands Rob Cohen, President & COO, 2U || Edtech Europe, London, UK
- 3. We are stewards for some of the best brands in the United States
- 5. Immersive Course Content Live Classes Real-World Experiences Social Engagement Dedicated Support Services The Recipe for Great Outcomes
- 10. What We Do 2U enables great colleges and universities to bring their programs online using an integrated Platform: Proprietary Cloud-Based SaaS Technology Bundled Technology-Enabled Services CONTENT MANAGEMENT SYSTEM O N L I N E C A M P U S A P P L I C A T I O N P R O C E S S I N G P O R T A L C U S T O M E R R E L A T I O N S H I P M A N A G E M E N T CONTENT DEVELOPMENT S T U D E N T A C Q U I S I T I O N P L A C E M E N T S E R V I C E S S T A T E C O M P L I A N C E S E R V I C E S S T U D E N T & F A C U L T Y S U P P O R T
- 11. The marketing task we face is unique and challenging
- 12. • Finding the right student at exactly the right time • The time between when a student finds a program to submitting an application can be a long time
- 13. Several years ago we built an algorithm to guide our understanding of which programs have the ability to scale IPEDS U.S. Bureau of Labor Statistics CareerBuilder US News Primary Data Sources 2U PROPRIETARY DATA
- 14. Reasonably Inelastic Market University Brand Strength is HIGHLY Regional Two key insights came out of this research
- 15. We had seen this insight in the marketplace and in our early program experience We had seen this insight in the marketplace and in our early program experience College Enrollment College Costs
- 16. We had seen this insight in the marketplace and in our early program experience Masters in Teaching Programs Masters in Social Work Programs
- 17. University Brand Strength is HIGHLY Regional Reasonably Inelastic Market Two key insights came out of this research
- 18. • Every school is incredibly regional • Even though the online modality makes geography essentially irrelevant – a strong regional bias still exists We explored undergraduate migration patterns at every U.S. University and found the following:
- 19. 53% 46% 41% 15% 18% 21% 0% 20% 40% 60% 80% Campus Undergrad Campus Grad 2U Online Grad In Region In State Enrollment Percentages by Geography (Universities with launched 2U program)
- 20. 80% 59% 0% 20% 40% 60% 80% 100% Prospects Students Out of State Prospect & Student Percentages Prospects across our programs are more national – the regional bias occurs as students move towards submitting their application Submit Rate by Distance to Campus 0% 1% 2% 3% 4% 5% 7 21 50 103 159 227 296 345 387 445 525 609 689 797 892 988 1,135 1,233 1,362 1,516 SubmitRate 0 1,5001,000500 Miles from Campus
- 21. So why are University brands so regional?
- 22. University brands differ in key way from other established, world-class brands
- 23. Most brands have a relatively small competitive set…
- 24. …and their exposure is incredibly broad 1.7 billion servings consumed per day 1 billion iOS devices sold to date 3.5 billion searches per day 136 million customers flew Southwest in 2014
- 25. University Brands differ dramatically • Many Universities competing for a share of voice • Materially smaller set of people who have direct interactions with the brand
- 26. Exposure to these brands is inherently regional
- 27. This has been ingrained for hundreds of years
- 28. So what does this mean for our shared mission to expand the University beyond its geographic bounds?
- 29. Students enrolled retention adjusted tuition bookings *bookings as of Q1 15, all else as of year end 2014 $795mm 12,300 Impact
Editor's Notes
- Good morning and thank you so much for the chance to present to you today. My name is Rob Cohen and I’m President and COO of 2U. We’re a cloud based software as a service company that partners with top universities to deliver the world’s best education programs, online.
- We have a No Back Row Approach that allows students access to great education and puts them in the front row to experience it.
- 2U’s partners are among of the best Universities in the United States including 6 of the top 25. The kind of Universities that have never embraced online education. That have felt it was beneath them. I’m not exaggerating … before partnering with us, one of our universities needed their Board of Trustees approval to even offer an online degree. These schools have felt that there was no way to achieve the quality and experience of their on-campus program in an online format.
- For a long time that was true. As a result, one of the largest challenges we face is the preconceived notions of online education -- that online students are a lesser being than their on-campus counterparts. Detractors say it's a different degree. A different level of rigor. And less prestigious. At 2U we seek to prove that online education can meet or exceed the quality of its on-campus counterparts. It is not easy or cheap. But we firmly believe that with the right approach and investment, on-line education can provide the kind of education that is worthy of the best schools in the world. We, along with our universities partners, are finally desegregating online students. Online students have gone from out of sight and out of mind to right smack dab in the front row. So how do we collectively end the segregation of online students? Some may argue its better marketing, or new branding, or clarifying the offering. But it’s none of those. The desegregation of online students will only occur when online programs consistently deliver great results for great students.
- 2U’s approach to education is simple and effective. Put students in front of great content. Then put them in front of great professors, and then finally put them in the real world to use the skills they have developed. And do this on a platform that encourages contact and collaboration, and make sure that support services for students and faculty are white glove and make everyone feel connected to the university and to the program.
- Digging in a little … Instead of putting a student in a large 100 person lecture hall watching a professor behind a podium, our students consume immersive, dynamic content on-their own time anywhere in the world. This content is produced by 2U, but is inspired and created by great university faculty.
- And after consuming this content … students go to class. Just like on campus they pick a time and they show up with everyone else. In a small room with live audio and live video and with an average of only 11.9 students, they sit in the front row and they interact with their professor and their classmates in real time. In this environment, there is truly no back row.
- Finally, students take what they have learned and they use it in the real world. Students in our Master of Nursing program get placed in a hospital or doctor’s office. Midwifery student deliver real babies. 30 of them or they don’t graduate. Master of Social Work students counsel real patients in real social service agencies. And students in an MBA, Master of Data Science, or Masters of Communications program come to on-campus and around the world immersions and physically interact with their professors and fellow classmates.
- As we speak, our first MBA partner, MBA@UNC, which is offered by the University of North Carolina at Chapel Hill’s Kenan Flagler School of Business and is ranked #1 for online MBA by both US News and World Report and The Princeton Review, is hosting an immersion in London attended by 131 students and 15 faulty and university staff.
- 2U’s business model is to fully enable the universities we partner with. We provide the Marketing, Recruitment Support, LMS, Student Support, Faculty Support and production of all curricular content. But to be clear, these are university programs. The university makes all admissions decisions, provides all faculty, and confers all degrees. Students pay the same price as on campus and students get the same degree as on campus when they graduate. But 2U is there to support the university and students at every stage of the program.
- I’d like to focus now on the marketing that we do for our university programs. We invest our capital to find them students.
- It is challenging because for these highly selective and expensive universities we need to find the right student at the right time in their life. And unlike any time in these university’s histories we are looking for students who want to attend but not physically go to these schools. Evaluating the effectiveness of our approach is complicated by the fact that prospective students take an average of 9 months and up to 3 years after they contact us to enroll in a program.
- Given the multimillion dollar investment that 2U makes for each degree at each school we partner with, choosing the right schools and the right programs is of critical strategic importance to us. So we set upon developing an algorithm that would help us determine which programs would scale most effectively. Simply, in a business characterized by large bets, we wanted to stack the deck in our favor. To develop this algorithm, we used four public sources: the US Government‘s IPEDs data set which is a database of every US school and the number of degrees they confer for each discipline, US Labor data showing the jobs that are and will be available by georgraphy, CareerBuilder data showing the relationship between the place a student got their degree and where they actually work, and finally rankings data from US News that might impact the attractiveness of various programs to the public. We combined this data with Proprietary data from 2U that showed us the worldwide enrollment patterns from each program we enable.
- The result of this was an algorithm that for us did exactly what we wanted. We now know which programs are needed where. So we know which prospective programs are likely to scale and where we should invest our capital. The algorithm actually gives us a prediction of steady state enrollment for each university and degree in the United States that we might partner with. Two other insights came out of this research. First, we found that the market demand for higher education is reasonably inelastic and second that even nationally known University brands are highly regional in their appeal.
- That demand was inelastic did not surprise us … market data shows that US higher education enrollments have grown substantially at the same time that the cost of this education has greatly outpaced growth in family income.
- The IPEDs data shows us – this is tuition at each university program graphed against annual degree conferrals – that there is in general low correlation between price and number of conferrals and specifically that the 2U programs – in blue – have grown very large in spite of their relatively high tuitions.
- What surprised us was that US University brand strength was highly regional. That is … school’s traditional enrollment patterns, even for worldwide brands like Harvard and Yale, is incredibly regional. And even when programs are taken online and geography is in fact irrelevant – every one of our partner schools has a strong regional bias.
- That is … school’s traditional enrollment patterns, even for worldwide brands like Harvard and Yale, is incredibly regional. And even when programs are taken online and geography is in fact irrelevant – every one of our partner schools has a strong regional bias.
- Here is some simple data … for all of 2Us partner schools aggregated, 53% of on campus undergraduate students are from the same state as the school and 68% of them are from the same region. For Graduate programs at these same universities (and most 2U programs are graduate degrees) 46% of students are in-state and 64% are in region. Slightly less concentrated but still incredibly regional. 2U’s programs are yet less concentrated, but essentially we see the same pattern. Even though the degrees are online and geography should not matter, 41% of students are in state and 62% are in region. USC: 44%, UNC: 83%, GT/GW/American: DC, WUSTL: ~10%, Berkeley: 80%, SMU: 50%, NWU: 31%, SYR: 41%
- Looking deeper, our partner universities have no trouble getting interest from students across the US. But conversion is highly correlated with geography. 80% of prospects for our programs are outside of the home state for that program. But only 59% of students from these programs are out of state. As students get closer to deciding to actually apply to a school, they are less likely to engage with schools outside their region. This is most telling … there is a direct correlation between the distance from campus and the likelihood of a student to submit their application to be reviewed by the school. At 0 miles students show a 4.3% chance to submit their application, but at 1500 miles, only 1.4%.
- University Brands differ in a key way than other established world class brands like Coca Cola, Apple, Google and Southwest
- These other brands have a relatively small competitive set.
- And an exposure that is MUCH larger. 1.7 billion servings of coke a day 1 billion iOS devices 3.5 billion Google searches per day 136 million Southwest customers flying in one year.
- University brands differ dramatically. There are 4200 US Colleges and Universities and estimated to be over 18,000 higher education institutions in the world. And even at the largest of these universities the number of “customers” they have is materially smaller than other world-class brands. More people flew on Southwest Airlines last week than have graduated from an undergraduate or graduate program ever at our largest partner, the University of Southern California, since it was founded 135 years ago.
- Exposure to these brands is also inherently regional. You see the brands prominently only in local department stores and in local papers. And even graduates are more heavily concentrated locally.
- And these inputs have been around for a long time. None of the 2U partner’s schools predates Cambridge or Oxford, but Yale predates the American Revolutionary war, and every one of our school partners existed at the time of the first commercial airline flight. In some cases for hundreds of years, this attention has deeply ingrained these brands locally.
- So what does this mean to our university partners? Will this effect lessen over time? Will geography always matter for online education? I showed earlier that online masters degrees were less regional than their on campus counterparts, but not dramatically so. 2U invests heavily in each of our brands and we can see that this investment is increasing branded search outside of a schools home region. In the long run, we do expect our continued investments in these programs to heighten interest and conversion, but we think it will take time to move the market. For that reason, we have changed our corporate strategy in response to this data. At its founding, 2U thought it might have only one program in each vertical like MBA or Social Work, and we’ve specifically moved away from that. We now believe we can easily support multiple programs in each vertical, especially if the programs serve different regions. 2U actually already has multiple programs in 4 of the 13 verticals that we currently serve.
- Before I conclude I’d like to circle back to the future of online education and the impact 2U is making. Online education is the future. In the masters degree verticals that 2U primarily serves, I think is very few years before we laugh at the idea that people will quit their jobs and travel to a university to further their careers. Even in today’s market, for our university partners we have enrolled over 13K students from around the world and have generated for them $795mm in retention adjusted tuition bookings. We have retained 83% of these students inception to date. For 2U’s first two programs, both at the University of Southern California, 83% of graduates are employed in their field of study. In our MBA where nearly all are employed, 74% got a new job or promotion while in the program. And in our nursing program our students have a 100% board pass rate.
- I’d like to conclude with a quote from one of the 2U students who is breaking down the barriers between on campus and online. Last month, Emily Ham, an online student in the American University International Relationship program, who is also a US navy officer working at NATO headquarters in Europe, said in her commencement speech to nearly 600 on campus graduates: "The vast majority of you have no idea who I am. You haven't seen me on campus and you've never had a class with me. During my two years in this program, I have sat through lectures while in 15 countries. I have read textbooks and written papers while on trains, planes and automobiles. I have even submitted an assignment while on a ferryboat crossing the English Channel. Conducting my studies online has allowed me to continue serving my country overseas while obtaining a graduate education from one of the top international relations programs in the world."
- That’s what I hope 2U will continue to do for many more years and many more students. Thank you.