Phoenix Pays to Tell Its Story

September 1, 2010

When it comes to marketing, the University of Phoenix doesn’t like to be outdone. Its advertisements are ubiquitous on public transportation and television, its name is splashed across the Arizona stadium that hosted the 2008 Super Bowl, and earlier this summer it offered scholarships to members of the Boys and Girls Club as part of its sponsorship of basketball star LeBron James’s announcement of his next career move.

But while those efforts help spread Phoenix’s name by reaching a wide audience, they haven't prevented intense scrutiny from Congress, the Obama administration and various news outlets. The university and its parent company, the Apollo Group, are looking for new ways to bolster their credibility in the halls of Congress, the offices of policy makers, and the living rooms of the well-educated and well-informed.

While Kaplan Higher Education has The Washington Post brand and the backing of the Graham family to boost its reputation and to give Kaplan officials a chance to respond to any negative news about for-profit colleges, Phoenix doesn’t have a similar way of ensuring that its voice is heard in media coverage. In hopes of conveying Phoenix’s side of the for-profit college debate even when reporters on deadline don’t come calling, the company has begun sponsoring media events.

“What’s missing and what we’ve taken upon ourselves to inject into the minds of mainstream Americans is that over 70 percent of college students have families, are working or are otherwise nontraditional,” said Ryan Rauzon, a Phoenix spokesman. “Just by stating that fact, maybe their opinion of University of Phoenix changes and maybe they will recognize that we have a role to play and we’re playing it well.”

The University of Phoenix is the top-billed sponsor of NBC News’s Education Nation, two days of events and a week’s worth of coverage on NBC properties scheduled to begin later this month. Phoenix-sponsored discussions about the future of higher education, hosted by the promotions department of The New Yorker and Vanity Fair magazines, were initially advertised for this fall in New York and Washington, though they’ve since been pushed to the first quarter of 2011. Rauzon said the company also plans to hold a series of events with GOOD magazine, which calls itself a "platform for people who want to live well and do good," early next year.

Many media organizations (though not Inside Higher Ed) host policy forums, fashion shows or other events. Some of these events are sponsored by companies, giving them various roles (some of which are just promotional) in the programs.

Phoenix’s role in NBC’s event is not just a financial one.

William J. Pepicello, the University of Phoenix’s president, was one of just a few confirmed speakers mentioned in NBC’s first press release about Education Nation and the only college president other than Susan Hockfield, of the Massachusetts Institute of Technology, which is not an event sponsor. He was also the only representative of a sponsoring organization to be listed as a participant. He’s listed in the same sentence as Education Secretary Arne Duncan and New York Mayor Michael Bloomberg. Other sponsors include the Gates Foundation, Scholastic, Raytheon, American Express and American Airlines.

NBC News isn’t hoping to start a conversation that stays within the confines of Rockefeller Center. Throughout the week of Sept. 27, NBC programs including “Nightly News,” “Today” and “Meet the Press,” as well as offerings on MSNBC, CNBC and Telemundo, will include “[s]pecial news coverage and programming airing across all NBC News programs and platforms will extend beyond the two-day summit,” the company said in its initial press release.

NBC News was reluctant to say much on the record about Phoenix's involvement. In a statement, Summer Wilkie, a spokeswoman, said that "Bill Pepicello is a leader in online higher education and we're happy to have him involved as a panelist at Education Nation."

Elizabeth Scarborough, CEO of the higher education marketing company SimpsonScarborough, said that “NBC would never ever admit that Phoenix bought their way onto the program.” But, she added, “we all know that’s how conferences like this can work.”

NBC said Pepicello’s participation wasn’t tied to Phoenix’s sponsorship and Phoenix would neither confirm nor deny that his role was linked to the company’s financial support of the event. NBC said Phoenix would have to choose whether to disclose how much it had paid for the sponsorship; the institution declined, calling it proprietary information that competitors would want to get their hands on.

Nonetheless, Rauzon stressed that Phoenix officials were happy to see Pepicello listed alongside Bloomberg and Hockfield. “It’s broadcast TV, it’s Mayor Bloomberg, it’s MIT’s president,” he said. “Dr. Pepicello is the face of University of Phoenix … and we want him to have a seat at the table, the ability to communicate with the country’s leaders.”

Even if sponsorship and speaker decisions were made entirely independently, “it looks like the University of Phoenix bought access,” said Kelly McBride, ethics group leader at the Poynter Institute, a nonprofit journalism education and research organization based in St. Petersburg, Fla. “That image is a dangerous one for NBC’s credibility and it also undermines the credibility of the project.”

Reporters covering Pepicello's remarks at Education Nation “would be obligated to bring up and explore the criticism of the University of Phoenix because it’s so widespread and well-known now that your audience is going to wonder why you didn’t do it,” McBride said. Not asking Pepicello about the scrutiny facing his institution and sector “would reinforce that perception that this is not a real examination of education but a public relations effort on behalf of the company.”

Pauline Abernathy, vice president of the Institute for College Access and Success, said she was troubled to see NBC News hosting an event on a policy issue that included the same scrutinized player as both a sponsor and a participant. “Would NBC News have BP sponsor a summit on oil drilling and have the CEO on the panel?” she asked. “The industry has grown so rapidly I think people just haven’t caught up with the fact that these are very big corporations with an obligation to their shareholders.”

NBC has yet to finalize the details of the panel that will include Pepicello.

Independent of the question of journalistic ethics raised by Phoenix’s involvement in Education Nation, higher education marketing experts are of mixed views on whether Phoenix’s attempts to rebrand itself through policy discussions will be successful.

Scarborough said she thought Phoenix was in too much trouble for its events, whether with NBC or a highbrow magazine, to do much good. “If University of Phoenix were working from a position of strength, this would be a great strategy,” she said. “But they are working from a position of significant weakness.”

The University of Phoenix, she said, independently of Abernathy’s comparison to the troubled oil company, “is in a similar position to BP” with an already-negative public opinion and an oncoming rush of “new governmental rules and regulations which will continue to keep them in the negative news.”

John H. Burness, interim president of Franklin and Marshall College and a public affairs veteran who recently retired from Duke University, said he considered Phoenix’s involvement in Education Nation and with The New Yorker, Vanity Fair and GOOD to be “very smart.” From a marketing standpoint, he said, “you have to admire them … that doesn’t speak to the quality of the educational product at all but it does to whether they are doing a good job marketing themselves.”

At the NBC News event, he said, “even if you look at the other sponsors, you see highly reputable, prestige organizations – and it spills over to Phoenix, there’s a cachet in being involved with those groups.” Having Pepicello get equal billing with Hockfield and possibly other elite college presidents suggests “cachet, prestige and legitimacy as a very serious provider of educational programs.”

Reaching readers of The New Yorker and Vanity Fair with higher education policy discussions in New York and Washington, he said, was also a smart strategic choice for Phoenix. “That’s a demographic that most colleges and universities in the country would love to be able to talk to,” he said, but they just don’t have the budgets.

As for whether sponsoring events cobranded by media organizations will net any coverage, Rauzon of Phoenix said that while there is no outright expectation for the events to lead to pro-Phoenix stories, “I think we would love nothing more than” coverage that puts forth Phoenix’s full argument about providing access to higher education for low-income and working students. “Obviously we’d be happy to participate in coverage.”

And Rauzon said he “expect[s] our competitors will be sponsoring their own events, especially if ours are successful in changing minds about how we’re going to reach President Obama’s goal.”

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