Misrepresentation Regulations, Part II: What Implications Will We See?

As we previously discussed, the U.S. Department of Education’s misrepresentation rules open up colleges and universities to greater liability and accountability.  So what can we as education marketers expect when these rules go into effect?

Based on our research, we predict the new regulations will cause:

  • Demand for Greater Visibility – colleges will require audit-level visibility into lead aggregators’ affiliate networks.
  • A Shift in Marketing Strategy – colleges will look to lower risk, but higher cost school-controlled sources like direct mail, display, and search.
  • Less Demand for CPL Marketing – colleges will reduce Internet performance marketing activities due to the increased risks; we anticipate shifts of 10 percent or more of marketing budgets out of CPL in the next year into other safer channels.

The rules could also encourage cooperation between schools as they combine their purchasing power in the hopes of forcing new business practices, increase visibility to lead sources, and transfer liability.  We could also see consolidation among aggregators who don’t make efforts to adapt.

That said, we are pleased to see a commitment to increased visibility from aggregators who control a majority of their lead generation sources.  And while there still seems to be a general unwillingness or inability to increase visibility from aggregators who rely on affiliate-generated, call generated or email generated leads, there does seem to be an increased investment in internal compliance by all aggregators.

Until colleges and universities can gain greater control of the process, schools will be forced to increase marketing spend, and lead providers will see reduced demand for performance-based leads.

Stay tuned for Misrepresentation Rules Part III, where we’ll talk about the things you as an educational marketer can and should do to make sure your institution is in compliance.

Steve Winchester

Steve is the CMO at Helix Education. He has been an advertising account executive for more than 20 years. Steve received his BS from the University of Utah.