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British universities spend big to prepare for increase in tuition rates

Marketing Up, Applications Down
February 7, 2013

British universities increased their spending on marketing to potential students by nearly a quarter in the run-up to the introduction of higher fees, a Times Higher Education investigation has found, yet suffered a 7.4 percent fall in applications.

Commentators have suggested that this type of expenditure will continue to rise owing to the "circular logic of the market," despite it being a "zero-sum game" for the sector because overall undergraduate places are capped.

Spending at the 70 institutions that responded with figures to a Times Higher Education Freedom of Information request rose from £26.1 million ($41 million) in the 2010-11 financial or academic year to £31.9 million ($50 million) in 2011-12.

This represents a 22.4 percent increase (following a 0.1 percent fall from 2009-10 to 2010-11) and an average spend per institution of £455,461 ($714,000). Spending rose at 53 universities, fell at 14 and was static at three.

Paul Temple, co-director of the Center for Higher Education Studies at the Institute of Education of the University of London, said that the surge in advertising to prospective applicants was a response to the "unknown territory" of higher fees and a more competitive market for students.

London Business School devoted 2 percent of its expenditures to attracting students, the largest proportion recorded. It did not respond to Times Higher Education's request for comment before the print deadline. Of the 70 universities offering data, the only institutions to spend nothing on advertising to students in 2011-12 were the Universities of Cambridge, Oxford and St Andrews.

There appeared to be little obvious correlation between the surge in such marketing and applications.

Among the 20 universities with the biggest percentage rises in spending in 2011-12, the average fall in applications to the Universities and Colleges Admissions Service by 30 June 2012 was 5.6 percent –- only slightly better than the national average decline of 7.4 percent.

For example, Glasgow Caledonian University more than doubled its spending on marketing to potential students, yet applications fell by 3.5 percent. A spokeswoman for the university said that the spending followed a period when six schools at the institution merged into three and the launch of a London campus, so was not "typical."

Chris Hackley, professor of marketing at Royal Holloway, University of London, said he could see the "logic" of large student advertising budgets aimed at “international, high-end markets” such as that targeted by London Business School and the "low-end, local markets" sought by some new institutions.

The international students the business school aimed to attract were often "poorly informed" about university prestige, research ranking and other factors, so advertising was an important tactic, he added.

But Professor Hackley was more skeptical about the value of such marketing for the "majority of mid-ranking universities," as the main factors for student choices such as "locality, parental preference, friends, costs (of accommodation), course choice, rank and the number of [admissions system] points fall rather beyond the reach of advertising."

Universities were also asked what would happen to their spending in 2012-13. Thirty said it would grow, 19 said it would shrink and 15 said it would stay the same.

 

 

 

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