Universities’ marketing budgets are bloated, but they make sense

USyd's advertising campaigns have been deservedly mocked, but does its overall ad budget stack up?

The University's recent 'unlearn' campaign has been much-mocked online. The University's recent 'unlearn' campaign has been much-mocked online.

The National Tertiary Education Union (NTEU) and Liberal senators make for strange (and awkward) bedfellows, but there is one issue on which they agree: both say the $8.7 million dollars that the University of Sydney spent on marketing last year was too high.

Senator James Patterson suggested it was inappropriate for “government-funded, not-for-profit universities [to] spend up big on marketing to attract students’’. An organising group for the University of Sydney NTEU branch urged the University to redirect “some of that marketing budget to our salaries and do something worthwhile with the university’s money.” These arguments are rhetorically powerful, but in order to score a political point they conveniently disregard the funding model driving university advertising.

In 2012, the Gillard government uncapped the number of places available to students at higher education institutions. Previously, the government had only funded a set number of places per degree and institution.The Labor government’s decision was motivated by a desire to universalise the social benefits of higher education and create an intensely skilled workforce. To some extent, that has happened, but the Gillard reforms have also created pernicious competition between universities for a growing, but still limited, number of potential students.

The problem is that at the same time as successive governments have implicitly endorsed Gillard’s uncapped enrolments policy, they have cut higher education funding in real terms.

Glyn Davis, Vice Chancellor of the University of Melbourne, is explicit about the issue that has created. “Canberra wanted more people go to university, but now baulks at the inevitable cost of growing student numbers.”

Vicki Thomson, Chief Executive of the Group of Eight elite universities, is similarly blunt. “Australia needs its full fee-paying international students to make up for the increasing Government shortfall in our revenue,” she says.

To attract those students, universities spend on marketing both at home and abroad.

Yet if, as Davis argues, large numbers of domestic students are a drain on universities’ resources, why advertise to recruit them?

There are three answers. First, funding differs substantially between faculties. Having a large enough student population in a cheap course to teach can subsidise students and research in more expensive areas. Second, if students are packed into lectures like sardines, universities’ costs per student go down, producing economies of scale. Third, recruiting international students depends on how well Australian universities perform on ranking systems.

“Internationally, families and education agents who assist students with their acceptance process into an Australian University look to world rankings as their quality assurance statement,” Thomson says. “If we are to continue to attract international students our rankings have to stay high, which means as many [Australian universities] in the world’s top 100 as possible.”

Universities like Sydney can game rankings like QS Graduate Employability by recruiting students whose high ATARs suggest they will have every chance of being employed on graduating. Domestic advertising helps attract them.

In higher education circles, the logic of advertising is well known but not well liked, in part because much of the competition between universities is redundant. Sydney, for example, has a student body that is wealthier and more likely to be privately educated than the general population; attributes that suggest its students are likely to attend university whether or not they are marketed to. Nonetheless, the University cannot stop marketing for fear its competitors will convince potential students to attend their campuses instead. The sector is caught in a prisoner’s dilemma, and it is getting worse at a rapid rate. In 2012, Wollongong University spent $944,000 on marketing. Last year, its budget had risen to  $5,619,000 — more than a fivefold increase.

This is not to suggest that universities’ ad campaigns are well designed or particularly informative. For example, USyd’s current ‘Unlearn’ campaign suggests its students will avoid a fusty corporate job, but its curriculum revamp is designed to ensure higher rates of traditional graduate employment, which means a lot of office jobs.

The precipitous rise in universities’ marketing budgets has made attacking them an easy applause line. While the content can and should be critiqued, the NTEU ought to be careful in going after the fact of advertising.  Once it becomes solidified in the public’s imagination, the perception that universities are overspending will justify cutting funding overall much more easily than it will support unions’ pay claims.

Vice Chancellor Michael Spence.

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