Market Size - Leads Purchased to Find Students that are Searching for Online Education Options: US
While there is no preexisting information to fully answer your question, we've used the available data to pull together key findings:
The market size for paid leads in the higher education sector may be as high as $1.75 billion. However, insufficient data is available regarding the market size specifically associated with online education.
Below you'll find an outline of our research methodology to better understand why the information you've requested is publicly unavailable, as well as a deep dive into our findings.
After my initial searches for sources that might directly answer your question proved fruitless, I looked for market reports for the lead generation services industry with the hope that such reports might segment the industry by end user industries (such as education). Unfortunately, I found no reports that offered these details.
So then, I looked for data relating to the marketing or advertising budgets for higher education institutions, specifically online education, and how these budgets are allocated across channels. I also sought out market reports on the education marketing industry, hoping they may offer figures on overall marketing spend. However, the information in such reports is largely paywalled. In addition, I searched for information regarding higher education or online education admissions or student recruitment budgets and methods. But again, this information was quite limited.
Then, I shifted my focus to online education lead generation companies to see if I could find information on market share for these companies, but that information was not publicly available.
I also searched industry sources such as Chronicle of Higher Education, Inside Higher Ed, EAB, and the Education Marketing Association.
Higher EDUCATION LEAD GENERATION SPEND
A 2015 article by education insights company Noodle states that the market size for lead generation services was $1.75 billion at that time. The article is not entirely clear on whether this figure represents the entire lead generation market or the education portion of that market.
However, according to Volcom Education, an education-focused marketing firm, 17% of a school's marketing budget should be allocated to paid leads. A 2016 article at Inside Higher Ed suggests that the current market spend of all US colleges is around $10 billion per year. Using these two figures, we can roughly estimate the market size for lead generation for higher education to be $1.7 billion ($10 billion x .17), which is quite close to the aforementioned figure. That said, the Volcom article does not qualify paid leads and likely includes things such as pay per click advertising, which may skew the figure.
Though slightly dated (2014), an article on the lead generation industry notes that education is one of the largest industries served, primarily due to the influx of online education options. Lead generation for education has an average cost-per-lead of $65.69, according to Marketing Charts. Another Noodle article suggests schools pay anywhere from "$20 to $150 per lead."
The Wall Street Journal notes that the education sector allocates around 11% of their overall budget to marketing. However, Inside Higher Ed says that colleges spend around 1.5–6.0 percent of the overall operating budget. An undated article that references 2017 data suggests that education marketing budgets are expected to increase 20.4% in 12 months.
The education marketing services industry is expected to grow at a CAGR of over 11% from 2017 to 2021, but the industry's market size is hidden behind a paywall.
US online education market size is expected to reach $2.857 billion by 2022. However, despite an exhaustive search, I could not find data regarding average marketing budgets or lead generation metrics for this sector of the education market.
The education sector spends $1.2 billion each year on Google ads, and 24% of that is generated by the online education category. Higher education institutions are allocating most of their online advertising budget to website and social media strategies, while about 25% goes to "other," which includes things like pay per click and partnerships.
And EAB survey found that universities spend $344,531 per year and about $88 per student on admissions marketing.
An article by Noodle outlines four primary forms of lead generation practice in the education sector. They are:
• White Label Marketing: Used by "90% of lead generation vendors," this method involves the vendor hosting an advertiser's content in order to pass on leads.
• Recruitment: This method involves paying recruiters a commission for students who enroll.
• Social networks: This method uses social channels like Zinch (now Chegg) to give more direct access to students.
• Matching: Matching sites attempt to match students and schools based on student questionnaires. This method delivers higher quality leads.
Several articles discuss the shady tactics some colleges use to generate leads, such as hiring companies to generate online clicks and inquires, which are then sent to call centers. Some of these schools offer a percentage of tuition to these lead generators, which is a violation of Title IV regulations.
In conclusion, US higher education institutions may spend as much as $1.75 billion on lead generation, but data specific to the online education subcategory was not available.