Purdue Global Budget: More than $132m spent on marketing last year

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10 replies
  1. Don Gorges
    Don Gorges says:

    Thanks for raising questions, Phil.
    Perhaps contacting the leadership team will offer further insights into their marketing investments. . .”The Marketing and Media Leadership team oversees several divisions that work together to give Purdue and its community its own unique voice” _ https://www.purdue.edu/marketing/about/leadership-team.php

    “We love showing off the work we’ve done! Here you’ll see many examples of how we’ve partnered with groups across Purdue to share their stories and reach key audiences. Discover for yourself the innovative ways we can all share the Purdue story.”
    https://www.purdue.edu/marketing/portfolio/index.php

  2. Steve hodownes
    Steve hodownes says:

    Thx for the data on Purdue Global interesting. The key point to look at when examining marketing costs is to examine marketing spend, leads and corresponding starts from a cohort perspective. For instance if I spent x in time period y the key question is how many inquiries, apps, an starts did that spend generate. Analiyzing by lead cohort is critical to get true view on aquistion costs, this is especially true in fast growing businesses

    Looking solely at marketing vs total enrollments or revenue can be misleading for a host of reasons. For instance lets assume aquistion cost in a given period falls or remains flat and marketing as a percent of revenue or enrollments roses.
    Should the incoming cohorts defect at a greater rate or defect earlier in life cycle would generate a higher marketing expense as a percent of revenue or total enrollments, when aquistion costs are truly falling. Granted, another explanation could be that students are not defecting at a higher rate but may be progressing at a slower pace and taking fewer courses per term. You could also have seasonality impact marketing expense as a percent of revenue or total enrollments. I have found that marketing spend and associated leads / apps generated often convert in a different time period than the financial period associated with the spend which can also lead to confusion. In summary the above analysis may be spot on but to truly umderstand what is happening to aquistion costs you need to analyze at the cohort level.

  3. William K. Zobrist
    William K. Zobrist says:

    It would be interesting to compare their budgets to that of ASU Online and WGU. Assuming PG aspires to attain and surpass enrollments of these institutions (we can agree there’s a finite pool of online students -right?) then they have to spend to 1)establish a new-ish brand in an established marketplace and 2)spend to take share from the competition. It seems at times there’s a nostalgia for public institutions not to engage in hardscrabble market activities, but, that doesn’t seem realistic if their overriding goal is the expansion of what they perceive is a unique offering to the world. Bottomline in higher education today – you have to spend money, lot’s of money to get students.

  4. Angy
    Angy says:

    “Extrapolating this number for a full 12 months, Kaplan HE as an OPM is likely making close to $315 million in revenue from the Purdue agreement, out of Purdue Global’s roughly $437 million in operating expenses. While Kaplan’s case is unique, that is still a large OPM operation, especially from just one client.”

    Assuming you are referring to FY 2019, the operating expense listed in the table is $399 million. Where is the $437 million number coming from? And what numbers are you adding together to get $315 million in revenue for KHE?

    • Phil Hill
      Phil Hill says:

      That’s a good question – the basic idea is that the accounting standards for official Purdue U financial reporting (shown in first post) is different than the operational budget used internally. The $437m op expenses comes from this table taken from Purdue U 2019 Financial Report:
      https://i1.wp.com/philonedtech.com/wp-content/uploads/2020/01/Screenshot-2020-01-04-15.24.04.png?ssl=1

      You rightly call out that the internal Purdue Global budget shows $399m. Both documents come from Purdue. I believe the differences are based on which year expenses are booked in cases of deferred payments due to KHE. Think of the budget in terms of how you run PG and calculate what fees are owed KHE immediately, which are owed KHE but deferred, and which are foregone. Think of the PU Financial Report in terms of what must be externally reported according to formal accounting standards.

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