Published on 2012/11/27
There are a number of different approaches higher education institutions can take to increase and diversify their online offerings, each with its own benefits and drawbacks.

Distance learning has come to the forefront of public and higher education lately with the emergence of MOOCs (massive open online courses) and the participation of institutions such as Harvard, Stanford, MIT, and others. This has not only brought the world’s attention to online courses and their ability to reach many more people than face-to-face campus-based programs, but has also added a semblance of legitimacy within and without higher education (“If they’re doing it, then it must be OK”).  Many educational institutions that have an adult student constituency are now being forced to ask themselves, “How should I be doing distance learning?”  And the answers are not always simple or inexpensive.

Institutions that have been dealing with adult students for any length of time realize that this market has changed greatly over the past ten years.  Online education in the United States continues to grow at a 5.5 percent annual growth rate (Eduventures, 2012), far exceeding the overall growth rate of higher education.  In the emerging Asian market, the rate is an even higher 17.3 percent (Ambient Insight, 2012).  But along with growing, it has also become a more competitive marketplace as more institutions begin to offer an expanding selection of adult education along with online programs.

As an example that this endeavor is not for the faint of heart, J.P. Morgan’s September 2012 Education Services Data Book for Private Sector Colleges and Universities stated that the per-student acquisition cost (advertising, marketing, and admissions) in March of 2008 averaged $3,038 and by June of 2012 these costs had risen to $5,611.  Considering that most continuing education adult students (on-campus or online) tend to take courses at a less than full-time rate, this is a substantial investment that requires an institution to be equipped to retain these students once they are enrolled.  Part of the reason for this increased cost of student acquisition (besides competition in bidding for online words/locations/etc.) is the ability to now expand student recruitment efforts to beyond the local area.  This also expands beyond a school’s brand area and results in not only spending money for student recruitment but also in creating brand awareness.

Another issue for online programs is how they will be created.  For most schools, there are three basic options with many variations.

  1. Outsource the entire process to a third party (course development, marketing, faculty and student recruitment, admission, enrollment, etc.) and put the institution’s name on it.  This usually requires no up-front expenses on the school’s part and creates a positive revenue stream.  Some of the downsides are: it really isn’t the school’s program; the institution may have little or no control over the content; no internal expertise has been created in online course/program building.
  2. Hire a large group of instructional designers (ID), technologists, marketers, and subject matter experts to work with faculty to create and market online programs and purchase a learning management system (LMS).  This allows an institution to control content and be consistent in each section of a course; build reusable courses that can be taught by any subject matter expert; and create internal expertise; manage messaging, etc.  But it also takes a considerable amount of time (two to four months per course per ID) and investment (usually $50,000 to $100,000 per course plus marketing costs).
  3. Purchase an LMS, hire/rent ID trainers, and train faculty to develop their own online courses.  This is the most economical method but does not allow for consistent content in each section of a given course.

As mentioned earlier, institutions can cherry pick from each of the models listed and create their own combination from the three models.

Though they may not have the resources or reputation for MOOCs that some institutions do, schools with adult education programs that wish to maintain or grow their enrollments must be willing to make substantial investments in both their marketing and online program development activities in order to remain competitive.

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Readers Comments

Yvonne Laperriere 2012/11/27 at 9:22 am

Purely from the perspective of lowering cost-per-student, I think it is clear that university partnerships with MOOCs is one effective way to go about it. But the risks are high, as outlined here in this article: loss of control and ownership over content, and, most importantly, no capacity-building within the organization. Dependence on outside providers I think could be very poisonous for higher ed, as what the industry needs right now is capacity building and new expertise in existing professionals.

A new expertise that would be tempered by knowledge of how things were and used to be, keeping it grounded and safeguarding certain principles of higher education.

Peter Gammell 2012/12/04 at 11:38 am

Another option for retaining those students is to be a leader in education innovation. Rather than merely following others down some yet unproven rabbit hole, why not create our own rabbit hole, thus retaining the intellectual property and institutional learning of home grown innovations to learning. In this way we truly differentiate ourselves in the market, while gaining a deeper understanding as a leader that will pay off dividends in the long term. Throwing money at advertising and marketing is a bottomless pit unless the organization is truly making itself interesting to the growing and increasingly discerning and connected market.

MOOCs are here to stay, which suggests that market bubbles will form in that sector too. Maybe we should ask the question, “what’s next?”

Scott Greenberg 2012/12/04 at 11:47 am

With the increasing availability of MOOCs, to what extent will people be willing to pay for noncredit online courses offered through colleges and universities when they can take such courses free? Do you have suggestions on how we can differentiate our noncredit online courses from MOOCs?

    Kevin 2012/12/10 at 5:10 pm

    Gaining information is one thing and getting third-party certification for the effort is another. Most hiring bodies tend to like a demonstration of capabilities beyond an individual saying that they “took a MOOC” or “read the book” on a certain subject. Certificates (beyond certificates of attendance) and college credit (for either degree or professional development) usually demonstrate a certain level of mastery as well as exposure to a topic. The MOOC itself may be of interest and value to the individual who is already credentialed and experienced within a certain area, but most individuals will always be willing (required) to pay for a noncredit course (or exam) so long as hiring entities require that third-party demonstration of mastery.

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