In this third article from our series on marketing online education, we explore how to use CTV, OTT, and digital radio to drive student lifetime value (LTV) and grow key target segments. These media form part of what is often called “Push Marketing,” because unlike search advertising, which provides links in a reaction to peoples’ existing search activity, push marketing sends your messages to people not already looking for your product. Push marketing has a lower response rate per message than sending links to people already looking for your product, but it has two great advantages:
- Incremental audiences, and
- Higher LTV customers.
Other medias such as broadcast television and terrestrial radio are also considered push marketing, but the digital forms of CTV, OTT, and digital radio can be distinctly advantageous when combined with the characteristics of online education and used to their full advantage as I’ll explain.
Why CTV/OTT is a good fit for online education
Whether we’re talking about online university programs, career bootcamps, or K-12 education, all these audiences share three important characteristics: high revenue per student, large differences between students’ lifetime values, and they represent a niche audience compared to the general population of TV watchers. Some readers may dispute the “large differences” in lifetime value, stating that the tuition is the same for all. However, I would simply point out that the difference between a student that drops out and one that graduates and lands a lucrative job has a great impact on the institution’s reputation and its future success. Not to mention that some bootcamps use income share agreements, which means that dropouts may not even pay, and only represent costs and negative profits to the educating institution.
The three characteristics of high revenue, varying LTV, and being a niche audience fit well with CTV, OTT, and digital radio, because while those medias have higher CPM’s than their broadcast counterparts, they are also targetable using online databases. Consequently, if high value audiences can be identified using these online databases, the cost of student acquisition and profitability can be quite attractive.
How to be successful
You might imagine that in today’s sophisticated marketplace using programmatic buying, DSP’s, AI, and online databases, it’d be easy to successfully run a profitable CTV campaign. You’d be mistaken. If you simply “run some CTV,” I can pretty much guarantee you, that it won’t be profitable.
Unfortunately, in the ever more technical and complex world of marketing technology, it is increasingly common for buyers to not fully understand what they’re getting for their money. Combine that with vendors that are paid based on volume, using a fixed fee per thousand impressions, and it’s easy to see why little targeting takes place in practice, so that high spend volumes can be achieved. I’ve seen DSPs in which you can select, for instance: “women”, “in California”, and “children in the household”. You might imagine that those settings would select prospects with all those characteristics. Again, you’d be wrong. In this DSP, the default selection menu was set to implicitly select “any” of those characteristics so that your ad would be sent to any woman, and anyone in California, and any household with children. In order to combine the attributes to get women, with children, and living in California, you had to ask for it to be programmed for you outside of the self-serve menus. That’s an isolated example, but I can assure you that even at the biggest name DSPs, data on-boarders, and agencies, there are many default procedures which are not to the buyer’s advantage, simply because buyers are rarely involved in what is actually happening at a detailed level. Let’s just say, it can be a “buyer beware” environment, and to be successful you need to be, or be represented by, a sophisticated agent that has your profits as a priority.
Warnings aside, there is a big upside for the sophisticated buyer. Because you’re sending your messages to prospects not already searching for your product, you’ll be reaching new audiences. Audiences which your competitors are finding hard to reach due to the problems mentioned above. You can also select audiences that have a higher propensity to buy and look like your highest value customers, which turns the economics in your favor. If you want to scale your business beyond existing searchers, you have to be able to cost effectively reach new audiences and these medias facilitate one path for doing that, because they are targetable, and messages can be sent on your schedule.
Online education sales are characterized by big ticket purchases, varying LTV, and niche audiences. These characteristics make online education a good fit for CTV, OTT, and digital radio, all of which can be sent to specific audiences which have been pre-selected to have high response rates and high lifetime values. The media are often easy to use poorly, but difficult to master, and thus require a sophisticated buyer or a large time investment, but the rewards are increased avenues for profitably scaling your business.
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