Chances are you've come across University of Phoenix ads on billboards, TV, or while going about your business in GMail. But that's because its parent company, the Apollo Group, spends hundreds of millions on marketing.
Traditional universities offer online programs as well--often at a lower cost than Phoenix's $60,000 price tag. But they often lack the online marketing budgets and expertise to get the word out to potential students. According to Ranku co-founder and CEO, Kim Taylor, "schools should not have to be good at online marketing and SEO."
Her mission is to level the playing field by offering a search engine where students can discover and apply to online programs from traditional universities. The system returns results based on users' interests in their LinkedIn and Facebook profiles, and offers upfront info about application requirements, costs, and other relevant program details. Current partners include Liberty University, Western Governors University and the University of Arizona.
Ranku was founded in June 2013 by Taylor (a former adtech manager who also starred in the short-lived Bravo reality show, "Start-Ups: Silicon Valley") and Cecilia Retelle (former senior director of education policy at the U.S. Chamber of Commerce) The startup recently graduated from the Kaplan EdTech Accelerator and has already raised $500K in a seed round led by Mark Cuban, with GSV and Microsoft Ventures participating.
Their mission, Taylor tells EdSurge, is to "disrupt the lead-gen models" that have worked to the advantage of for-profit schools. She believes traditional universities can offer better, cheaper online programs than for-profit colleges like the University of Phoenix. But "unless these schools understand lead generation and QuinStreet [an online marketing and advertising company]," Taylor says, "they're fighting a losing battle" against for-profit online education companies.
Online schools are some of the biggest advertisers on Google and Facebook, pumping tens of thousands of dollars daily on lead-gen and ads. The average cost of each student acquisition, in her estimate, runs anywhere from $3,000 to $5,000. "If you're the University of Texas and your tuition is $9,000," she asks, "how do you compete with a school that can afford to spend $5,000 on marketing?"
Taylor is well-versed in the intricacies of online education marketing. In her previous role as Director at Ampush Media (an adtech firm), she managed a $25 million portfolio of every major online university--including schools like the University of Phoenix, Kaplan University and 2U. Prior to that, she worked at Alloy Media where was the the "Education Salesperson of the Year."
Taylor says she isn't the only one looking to be a thorn in the side of for-profit online universities. On October 16, new FCC regulations will require prior express written consent for automated telemarketing calls and texts. Based on her experience, for-profit schools typically generate as much as 60% of their online traffic from call centers. She believes they could lose as much as 30% of the traffic under the new rules.
In an appearance on CNBC about his investment in Ranku, Mark Cuban says companies like The Apollo Group (which owns the University of Phoenix and other for-profit online schools) won't be around for long. "They spend so much money on promotion, they create the illusion that you're going to get value...I think that if you look at the outcomes...they're just not there."
