2015 May GrayReports - Student Demand Trends

GRAYREPORTS
Demand for Educational Programs
www.GrayAssociates.com
Results through May 2015

617.401.7662 www.GrayAssociates.com 2
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For more information please contact Bob Atkins.
Email: bob.atkins@grayassociates.com
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Clients: Higher Educational Institutions and Investors
Program Pricing:
Coming in 2015

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What is GrayReports?
GrayReports tracks demand trends in higher education.
§  Overall industry trend reports are a free monthly service, which includes these webinars.
§  Custom reports on trends by market and programs, which we provide to our paid subscribers:
─  Monthly reports for their specific programs and markets
─  On-line access to detailed data for their programs and markets
Over 42 million qualified inquiries
January 2012 to the present
Over 930,000 new inquiries in May 2015
Over 185 programs with over 10,000 inquiries
Over 300 cities with over 10,000 inquiries

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Key Demand Trends and Observations
1.  May had the worst year-over-year inquiry results of 2015, down 13%.
2.  Year-over-year...
1.  Inquiries for on-line programs reverted back to their decline, down 17%.
2.  Inquiries for on-ground programs weakened further.
3.  Conversion rates for mature months continued to decline.
4.  Average cost per converted inquiry continued to rise.
3.  The largest programs and markets continued to lose inquiry volume.
4.  The market gap has widened:
-  Struggling institutions dropped 20%.
-  Sustainers were flat.

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Agenda
1.  National Inquiry Trends
2.  Inquiries and Conversions: On-Line vs. On-Ground Programs
3.  Views by Program and Segment
4.  Marketing Implications
5.  Summary

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Overall Student Inquiries
May demand dropped from April, and was down 13% from year-ago levels.
§  January and February were down 12% and 10%, respectively.
§  March and April had a narrower gap to prior year.
§  May had the worst year-over-year comparison of 2015.
-13% YOY
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
National Inquiries
All Programs and Award Levels 2014 2015

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1.  Applications are counted in the month in which the inquiry was received (i.e., an inquiry that is received in January and converts in March will be counted as a January inquiry).
Typically, the application rate will rise for at least three months after the month in which the inquiries were received.
3.4%
3.1%
3.6%
3.5%
3.6%
3.6%
3.8%
3.3%
3.4%
4.0%
3.1%
3.1%
2.9%
2.5%
2.6%
2.4%
1.7%2.8%
2.5%
1.8%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Education Industry Inquiry Conversion Rates
2014 2015 Average Immature Conversion Rate
Inquiry to Application: Conversion Rates
While mature months have been weak in 2015, more recent conversion activity is stronger.
§  January and February inquiries, now mature, converted at substantially lower rates than year-ago levels,
and as compared with the 2014 mature average.
§  March, April and May are a little below the 2014 norms for immature months.
Immature Months1
2014
Mature Average: 3.5%

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Number of Conversions
Mature conversions have been driven down by lower inquiry levels and conversion rates.
§  Conversions in January and February were down 23% or more.
§  March and April conversions have the best chance of matching prior year levels owing to their more
comparable year-over-year inquiry levels, and to conversion rates that are currently near the norm for
inquiries of that age.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Education Industry Inquiry Conversions
All Programs and Award Levels
2014 2015 2013
Immature Months1

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Average Price for Pay-per-Lead Inquiries
Unlike the pattern in 2014, the price per converted inquiry continued to creep upwards in May.
§  Inquiry prices rose 1% to $44.88 in May 2015.
§  In 2014, May prices fell 3% relative to April.
§  Through the first 5 months of 2015, inquiry prices were 5% higher on average year-over-year.
$44.01 $44.20 $44.23 $44.49 $44.88
$42.13 $42.24 $42.13
$42.87
$41.59
$44.97 $44.67 $44.86
$46.15 $46.45 $45.94
$43.11
$30
$32
$34
$36
$38
$40
$42
$44
$46
$48
Average Price per Pay-per-Lead Inquiry
2015 2014
Note: Inquiry price is the average price for pay-per-lead inquiries.

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Average Cost Per Converted Inquiry
Costs per converted inquiry have risen sharply in 2015.
§  Costs in 2013 and 2014 were comparable to one another, while 2015 has had a much higher average.
§  January’s cost was up 19% from prior year, while February’s was up 30%.
§  March, April and May are also trending well above prior year levels.
2014 $1,253 $1,359 $1,177 $1,230 $1,169 $1,262 $1,178 $1,346 $1,338 $1,153 $1,500 $1,393
2015 $1,497 $1,771 $1,718 $1,874 $2,630
2013 $1,367 $1,521 $1,326 $1,386 $1,376 $1,135 $1,266 $1,322 $1,454 $1,405 $1,379 $1,375
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500 Cost Per Converted Inquiry
Immature Months

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Agenda
5.  Summary

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Inquiries for On-Line Programs
Education Industry Inquiries: YOY Percent ChangeMay reverted back to the negative year-over-year variance trend, finishing down 17% year-over-year.
§  May and January tied for the worst year-over-year comparison of 2015.
§  April is the only month of 2015 whose inquiry levels have been up from 2014.
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Inquiries
Inquiries for On-Line Programs
2014 2015
-17% YOY

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Student Inquiry Conversions for On-Line Programs
February conversion levels finished below prior year for the seventh consecutive month.
§  January and February 2015 conversions were down 10% from 2014 levels.
§  The negative year-over-year gap has narrowed for mature months in 2015 compared with the latter part
of 2014 which saw declines in excess of 20%.
0
2,000
4,000
6,000
8,000
10,000
12,000
Inquiry Conversions for On-Line Programs
2014 2015 2013
Immature Months1

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Inquiries for On-Ground Programs
May has the worst year-over-year on-ground inquiry comparison of 2015.
§  May on-ground inquiry volume, while down only 5% from April, is 23% lower than prior year.
§  March has the second worst year-over-year comparison of 2015, down 15%.
2012
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Inquiries
Inquiries for On-Ground Programs
2014 2015
-23% YOY

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Conversions of on-ground inquiries continue to decline.
§  Conversion levels plummeted in November and December, and January was down 27% from prior year.
§  February 2015, the latest mature month, finished 32% behind 2014.
§  While not yet mature, March, April and May are far behind prior year levels.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Inquiry Conversions for On-Ground Programs
2014 2015 2013
Immature Months1
Student Inquiry Conversions for On-Ground Programs

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0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Conversions of External Inquiries
2014 2015 2013
Conversions of External Inquiries
Conversions of external inquiries are also declining at accelerated rates.
§  Conversions of external inquiries were down16% year-over-year in December.
§  Conversions of external inquiries in January and February were down by more than 30%.
§  March and April conversions appear unlikely to match prior year levels, and May is off to a slow start.
Immature Months

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Conversions of Internal Inquiries
The year-over-year gap in internal inquiry conversions was much broader in February than in January.
§  Conversions of internal inquiries were down 13% year-over-year in January.
§  February witnessed a 22% decline from prior year.
§  March, April and May are likely to mature below last year.
-
5,000
10,000
15,000
20,000
25,000
Conversions of Internal Inquiries
2014 2015 2013
Immature Months

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Agenda
5.  Summary

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Largest Programs: May Growth
Only two of the five largest programs grew year-over-year in May.
§  Registered Nursing inquiry volumes grew 67%.
§  Business Admin inquiry volumes grew a modest 2%.
§  Health Care Admin, which grew in April, was flat in May, while Medical Assistant fell 19%.
§  Criminal Justice remained the biggest loser, with a 65% drop.
14%
-7%
-39%
3%
-21%
67%
2% 0%
-19%
-65%-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
Registered Nursing/
Registered Nurse
Business Administration and
Management
Health/Health Care
Administration/Management
Medical/Clinical Assistant Criminal Justice/Police
Science
Year-over-Year Change in May Inquiries
Five Largest Programs
2014 YoY % Change 2015 YoY % Change

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Top 5 Fastest-Growing Programs in May
The four fastest-growing programs are new to the list in May.
§  Curriculum and Instruction was the fastest-growing program, followed by Education Leadership and
Administration.
§  Two of the five programs saw growth of 100% or more.
§  All five programs grew by at least 67%.
-55% -65%
93%
3% 14%
290%
100%
74% 70% 67%
-80%
20%
120%
220%
320%
420%
520%
Curriculum and Instruction. Educational Leadership and
Administration, General.
Health Information/Medical
Records Administration/
Administrator.
Psychology, General. Registered Nursing/
Registered Nurse.
Five Fastest-Growing Programs
1.  Includes only the top 75 programs (ranked on total inquiry volume since January 2012)

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Largest Cities for Inquiries
May inquiries were down by 10% or more across all of the top cities.
§  Only Atlanta saw a decline that did not exceed 10%.
§  Three of the five cities declined by more than 20%.
§  Chicago replaced Los Angeles as the worst-performing market, down 29%.
2%
-3%
-7%
10%
13%
-10%
-14%
-23%
-27%
-29%
-30%
-20%
-10%
0%
10%
20%
Atlanta New York Philadelphia Los Angeles Chicago
Top Five Cities for Inquiries
Note: The market for each city is defined as a 15-mile radius around the population center of its CBSA.

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Fastest-Growing Cities for All Inquiries
Three of the five fast-growing cities are new to the list in May.
§  Oklahoma City was once again the fastest-growing city in May.
§  Wichita, KS was second.
§  Augusta, GA, Greenville, SC and Miami, FL, all new additions, each had 6% inquiry growth in May.
5%
-8%
13%
5%
-8%
33%
25%
6% 6% 6%
-25%
-15%
-5%
5%
15%
25%
35%
45%
55%
Oklahoma City, OK Wichita, KS Augusta, GA Greenville, SC Miami, FL
Five Fastest-Growing Cities for All Inquiries
1. Includes only the top 75 cities by inquiry volume since January 2012. Data includes a 15-mile radius from the center of the CBSA.

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Sustainers vs. Strugglers: Inquiry Volume
The gap between Strugglers and Sustainers widened substantially in May.
-12% -15% -15% -12%
0%
-3%
-13% -16%
-31%
-44% -46%
-27%
47% 44%
28%
10% 9% 7%
-6%
-13%
-7% -7% -11% -9%
-50%
-30%
-10%
10%
30%
50%
Sustainers vs. Strugglers
Year-over-Year Change in Inquiry Volumes 2014
-15%
-11%
-8%
-4%
-20%
-6% -8%
0% -1%
0%
-30%
-20%
-10%
0%
10%
Year-over-Year Change in Inquiry Volumes 2015
Strugglers
Sustainers

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Inquiry Volumes by Category
Doctoral and Master’s inquiries were by far the best performing categories in the period.
§  Internal, Bachelor’s and Unknown Modality inquiries also saw positive growth.
§  Ground, Associate’s, and External inquiries were among the categories which fell the farthest.
38%
27%
15%
7%
2%
-7%
-11%
-13%
-14%
-17%
-23%
-25% -15% -5% 5% 15% 25% 35% 45%
Doctorate
Master's
Internal
Unknown Modality
Bachelor's
Online
Certificate
External
Associate's
Ground
Unknown Degree
Year-over-Year Percentage Change in Inquiries
2014 vs. 2015 (March – May)
Monthly Average
!

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Agenda
5.  Summary

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Key Findings
§  The mix of inquiries is shifting to :
-  Internal
-  Healthy schools (Sustainers)
-  Higher degree levels
-  Smaller cities in the mid-west and south-east.
§  There are tremendous variations by city, program, and modality.
-  Three of the five fastest-growing cities are new to the list in May.
-  Four of the five fastest-growing programs joined the list this month.
-  Inquiry counts for large cities are shrinking, while they are growing for smaller mid-western
and south-eastern cities.
§  You need a custom view that reflects the markets in which you compete.
§  You could know if you are winning or losing the battle for share.
-  Adapt your strategy to the market situation
-  Correctly assess company and management performance

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Upcoming Gray Associates’ Webinars
Please join us next month!
July Webinar
(June Results)
Wednesday, July 22nd at 1:00 p.m. Eastern Time

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Questions and Contacts
Today’s Presenter:
Steve Probst
Partner, Gray Associates
Please feel free to contact:
Bob Atkins
CEO
Gray Associates, Inc.
Bob.Atkins@GrayAssociates.com
617-366-2836

2015 May GrayReports - Student Demand Trends

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2015 May GrayReports - Student Demand Trends