Marketing is now a priority for Australian universities. With price deregulation for domestic students imminent, we are already seeing an escalating number of well-attended conferences on the subjects of pricing and marketing. Everyone wants to know the best and most effective way of pitching their universities to potential students, staff and other stakeholders.

Are universities measuring the return on their marketing investment? HECG is certain they are – with all the money and effort being thrown at marketing they need to know if they are getting value for all that input – but it is not entirely clear if measurement is consistent across the sector.

To remedy this HECG has devised its own measurement formula. This paper measures the correlation between 2012-13 changes in student revenue and 2012 marketing expenditure. Specifically it calculates for each Australian university (1.):

Return on Marketing Investment (ROMI) = (2013 Student revenue – 2012 Student revenue) / 2012 Marketing Expenditure (2.)

The three major international rankings of universities (3.) have agreed for the past five years on the top nine Australian universities. We would expect to see this group with a high return on investment. They have a head-start on other universities in both domestic and international markets due to their prestige and reputation – some marketing is already done for them.

Therefore, for the same marketing investment as other universities, they should see higher returns. The data tell a somewhat different story and the table below reveals a large variation in the effectiveness of marketing expenditure within this elite group.

We see that the universities of Sydney, Adelaide and Melbourne returned more than eight times their respective investments while ANU and UWA lagged in effectiveness, spending more than a third of their increased student revenue on marketing. See below for the full list.

Increasing competition from public universities, non-university private providers and international universities coupled with decreasing government funding, will require universities to carefully target their markets and optimise returns on their marketing dollar.

The good news is emerging practices in student recruitment marketing are innovative and cost effective, including digital and social media marketing, targeted agent selection and management methodologies, and using gamification as part of the recruitment experience.

1. Source of all data: 2013 & 2012 Annual Reports for each public Australian university. Line items: CGS, HELP, Fees and Charges, Marketing, Advertising and Promotional Expenses.
2. Student Revenue = Commonwealth Grant Scheme + Total HE Loan Programs + Total Course fees and charges
3. Academic World Ranking of Universities (ARWU); Times Higher Education World University Rankings and the QS World University Rankings