Plan Now to Reduce Reliance on Third Party Lead Vendors

The pending regulatory changes have created a lot of discussion around the impact of compliance in marketing and how stricter regulations will affect media spend. A good example is the recent press surrounding the University of Phoenix announcement to reduce reliance on third-party lead providers. Not to mention, lead vendors seemingly coming out of the woodwork with their plans for improving compliance efforts.

Here are some things to plan for as your school considers the changing cost-per-lead (CPL) landscape:

  1. CPL media costs will go up.  If lead providers truly have to maintain and report details on media compliance, they will be forced to stop including some of the less desirable channels that allow them to keep CPL costs low.  Expect that CPLs will go up for higher quality providers.
  2. Quality volume will decrease.  This is true, particularly for schools in the market of 40,000 leads/inquiries or less per month.  Schools that consume a high volume of leads will continue to receive the lion’s share of quality volume.  And schools that hit the middle tier of volume will face heavier competition to reach lead goals.  This, in a large part, will be due to the decreased ability for lead providers to pad lead flow with non-compliant sources.
  3. Now is the time to investigate alternative lead channels.  In order to obtain more control over marketing messages, schools should heavily investigate creating exclusive, high quality lead sources through direct efforts.  There are many new technologies and media offerings emerging in display, mobile, direct response print and TV that are becoming more cost-effective.  While none of these sources rival today’s current CPL market in terms of low-cost, the results are often coming close in terms of deeper funnel metrics such as cost-per-enrollment or cost-per-start.

We recommend that schools get out ahead of the changing landscape in the CPL ecosystem by proactively testing new alternate lead sources.  That way, when the regulations go into effect, schools are not caught unprepared.

Rick Bentz

Rick brings 23 years of experience in market research to his role as SVP of Business Intelligence at Helix Education. He earned a Bachelor of Science in Marketing with a minor in Finance from the University of Utah.