An occasional correspondent writes,
I am curious about your take on the amount of money that institutions are spending on marketing …
According to this story, those four schools spent $676 million on marketing in one fiscal year.
If private companies like Coke and Pepsi want to engage in an advertising arms race (a.k.a. the Cola Wars), that is fine because it is private money. If the shareholders don’t like it, they can vote out the board. However, a lot of this marketing money is from public dollars like Pell Grants, federal loans, GI Bill, etc. Public dollars should not be spent on an advertising arms race. Elizabeth Warren was looking into this in the context of OPMs.
It seems like a huge transfer of wealth from taxpayers to Big Tech. The fact that adjuncts who teach online get paid so little is what really gets me upset about this.
No one can unilaterally disarm in an arms race, but it seems like a condition of receiving federal aid could be that no more than X percent of your budget is marketing. This would mean some type of audits by government agencies, which are never fun, and the definition of “marketing” could be disputed. Schools might try to get around it with “content marketing” and other shenanigans, but it still seems like it’s worth a shot.
So many thoughts …
For obvious reasons, I’ve been reflecting a lot lately on my old constitutional law coursework. As long as the Supreme Court holds that money is speech—and the Supreme Court retains enough legitimacy to be taken seriously—I foresee major free speech issues around restricting advertising. If I were a betting man, I’d bet that the court’s legitimacy will have a shorter shelf life than its view on the “marketplace of ideas,” given how aggressively it’s shedding any pretense of respect for precedent.
In the ’90s, a book called The Supreme Court and the Attitudinal Model (affectionately nicknamed SCAM) by Jeffrey Siegel and Harold Spaeth made some waves in political science circles for its claim that justices reasoned backward from the outcome they wanted. At the time, that was considered a shocking claim to make. Now it’s almost banal.
And advertising generally isn’t what it used to be. Growing up, in the age of the media monoculture, ads tended to be corny. The best ones were either disarmingly sweet (Mean Joe Greene’s Coke ad, for example) or funny. They had to be, because they were expensive to air and the three networks had broad audiences. That led to inanity—anyone else remember the talking loaves of bread?—but the range of things that got advertised was relatively narrow and mostly inoffensive.
Now it’s normal to see medicines advertised with machine-gun fire recitations of alarming side effects (“may cause fatal events”) and legal or legal-ish sports betting apps during games. In that context, ads for colleges are almost a relief, even if they sometimes seem excessive. At the last minor league baseball game I attended, three of the outfield billboards were for local colleges. I don’t remember that from earlier years.
While we’re at it, separating institutional marketing from sports budgets at the Division I level would be a real challenge. How many students learn about universities from football? I’m guessing more than most of us would like to admit.
That said, marketing isn’t cheap, and the money comes from somewhere.
In the context of higher ed, separating public money from private money isn’t always clean. When I was at DeVry, the leadership there used to distinguish the taxpaying sector (meaning themselves) from the tax-consuming sector, which included private institutions. That was a bit convenient, as it left out the enormous reliance of most for-profits on federal and state financial aid, but there was a grain of truth to it. Nonprofit private colleges and universities benefit from tax exemptions and student financial aid, as well as (sometimes) research funding. In some states, they even receive direct operating aid. Higher ed is an ecosystem, rather than a system, but the entire ecosystem relies on public money in one form or another. In other words, assuming any actual respect for the law, it’s conceptually possible to attach limits on marketing expenses to the receipt of federal dollars.
The underlying issue the correspondent raises is a serious one. Why do we force public or publicly funded institutions to compete with each other? Why do we underfund them to the point that they have to treat students as means rather than ends? The need for tuition dollars is behind the marketing; what if tuition were less relevant?
Colleges have relatively fixed costs and relatively variable ones. In my more perfect world, public funding would cover the fixed costs and tuition could cover the variable ones. Instead, public funding falls well short of fixed costs, so they have to use variable revenues to cover fixed costs. That means scrambling to appease both prospective students and prospective funders, whether philanthropic or public. Advertising is part of that scrambling. When it works, it benefits the individual institution, but it’s likely negative for the ecosystem as a whole.
Unfortunately, the ideology that assumes the market is always right has become common sense among one and a half of our two political parties. Markets are tools, not gods; regulating them is not heresy. But at this point in our political culture, anything that displeases markets is punished, often with an unnerving sense of righteousness among the punishers. We’ve even developed a new twist on Calvinism—the “prosperity gospel”—to sanctify wealth and to cast the nonwealthy as undeserving. I almost expect the mascot of the next for-profit educational behemoth to be the golden calf.
Yes, I’d very much prefer to spend educational dollars on education, just as I’d rather spend medical dollars on medical care. Under the system we have, though, institutions can either compete or die. Changing that would require a political sea change.
It’s almost enough to make me miss the talking loaves of bread.
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