What Can We Learn from Education’s Pivot to Explicit Consent in Marketing a Decade Ago?

In Dec 2023, the FCC passed their ruling on mandating explicit consent from consumers to each advertiser they want to be contacted. Furthermore, the typical use of hyperlinks in TCPA disclosure statements referencing a long list of marketing partners will no longer be acceptable. Read more in our previous blog>>

Since then, this has become a hot topic in the customer acquisition industry. However, these changes aren’t entirely new to the performance marketing world.

Over a decade ago, the education online marketing industry faced a similar shift when the Department of Education implemented strict regulations on student enrollment marketing. In this exclusive interview, we speak with Tom Ferrara, Chief Commercial Officer at PX, who formerly led Edufficient (now PX) — an education online marketing platform that successfully adapted to these changes and thrived. He shares how the industry reacted, lessons learned, and what today’s marketers can take away from that experience.

1. What was the Department of Education's update for education marketing more than a decade ago? What was the situation before and after?

Just like the Centers for Medicare & Medicaid Service (CMS) is the federal agency governing Medicare, the Department of Education (DoE) similarly gets involved in Education. More than a decade ago in education online marketing, the landscape mainly was a lot of co-reg leads. Websites/ webpages are designed to ask people if they are interested in pursuing their education, and if they are, they send that information to a bunch of schools. Sometimes, the user didn't even know which schools their information was being sent to. As a result, they would be hammered with multiple phone calls from these schools, asking them questions about their preferred education.

When this update came in, the industry was freaking out. Everyone thought the online advertising market would soon dry up with nothing left, and these companies would go out of business. In essence, that did not occur. What occurred was that the number of leads was reduced because you could not send this lead information randomly to hundreds of schools anymore without the student knowing or giving consent. Now, students had to select every individual school. But because the number of leads was reduced, the quality of leads really went up. Fewer schools calling them →  increased conversion rates.  

Companies that did not change with these laws these marketing firms ended up getting fined, sued, and prosecuted. Unfortunately, some clients who weren’t aware that their lead providers were not following the rules also got prosecuted. The fines were in the 10–15 million dollar range for a lot of big schools and universities. This made schools and universities learn fast that they need to be careful with who they are working with, whether their partners are compliant, whether they are an established company, and how they document everything. This changed the whole process.

It led to a market where schools would rather work with trusted providers rather than any other provider that could get them students.

2. So basically, after this update, the shared model of leads completely disappeared in education enrollment marketing?

Shared leads are dead in education. The only way a lead would go to more than one school is when a student selects more than one school while giving consent, and they have to actually fill out a lead form for each school. To give you an example, if you were to go to a directory and look for schools near New Jersey and an online school for marketing, it would show you a list of 30 schools. You need to select one- fill out that form, then choose another- and fill out the second lead form. So, it reduced the number of schools the average person requested information from, from well over 5 to 2-3, and sometimes even less for master’s degree programs, for example.

3. How did Edufficient adapt to this new setup at the time?

Edufficient was an exclusive AoR only- this means when we had a school or university client, we would be the only one they dealt it and we handled everything on the lead generation side. We invested heavily in compliance. It required a detailed understanding of each publisher. We reviewed the lead forms multiple times a month, tested leads through them to see who would call and email them, had access to call recordings, audited publisher sites, and the placements- saw the text of the page, and ensured the advertising was not misleading in any way. So, in essence, compliance went up on steroids- it became the #1 priority.

We invested in stronger, 1-to-1 direct relationships with the top publishers. Because we did that, it allowed us to provide our clients with opportunities that no one else did. We established close and deeper relationships with the top publishers ranking on search for our clients’ programs and bid higher to get our clients on top. The result was more leads, better quality leads, and more students.

4. What impact did these changes have on client relationships and business growth?

The clients who embraced it and went along with the leaders in the space could ride the wave and grow substantially. The clients that did not embrace it basically who put their head in the sand and ignored it, a lot of them were fined and are no longer in the business. The ones that managed to stay in business saw declined growth. They had to pause and stop and ultimately realize they needed to do it anyway, but now they were really behind. They had to stop what they were doing to fix it rather than doing it right the first time.  

5. If you compare the reaction and sentiment to today when the TCPA update is more talked about, a lot of solutions being developed, what do you think was missing at the time?

The right technology was definitely missing at the time. What PX has created did not exist back then. There was no way to do what PX is providing, i.e., insert brands in the lead workflows at the time of consent. If that were available in education, it would have been huge.

Right now, the reality is that the lead setup is hard coded on the publisher site. So, in education, most sites are exceptionally compliant, and it’s not a bidded marketplace. The reason it's not a bidded marketplace is because technology didn't exist to allow for a bidded marketplace. If this technology did exist, these publishers theoretically could go to a bidded marketplace where they could make more money, and it would level the playing field, allowing the schools to bid more for better placement.

Today, we are living in a more litigious society. There are many more lawsuits on consent or TCPA violations taking place today. Class action lawsuits are being filed, which are very costly to defend- you end up spending hundreds of thousands or millions just to defend your business. So back then was the start of it, and now it’s happening much more than ever, where if you are not following the rules, you will be sued pretty quickly.

Back then, the education industry was the most compliant because of the regulations and restrictions. Now, in essence, it is leveling the playing field for education because of the updates being applied to all industries. 

6. What is your stance on the necessity and impact of the TCPA’s explicit consent requirements? How do you foresee these regulations influencing future customer interaction strategies?

Hopefully, all changes will lead to a better consumer experience. There are many call center generated leads- these leads are first generated in an offshore call center, then transferred to an onshore call center, then transferred to an indirect advertiser, who lastly transfers it to the brand. This whole process is broken and is a bad experience for the prospect. We want a better experience for the end consumer and the brand that buys the lead. 

A lot of what happened before a lead was generated was hidden and in a sort of grey area that nobody needed to look at because it did not matter. The TCPA updates are now shining a light on the whole process and will make everyone more accountable. Clients now have to choose their partners very wisely and look at their partners’ internal safeguards and frameworks- for instance are they a SOC-2 compliant organization, are they HIPAA certified, etc.  

7. What is the #1 learning that you share with other marketing leaders navigating these FCC changes?

Deal with companies/marketing partners who you can trust and who can provide all the services that you cannot internally. Take an honest look at yourself as an organization and what you can do. If you cannot do what’s needed, then you better partner with somebody who can.

Secondly, if people follow the rules- it creates a flight to quality, which basically means that the leads should convert more. You should have fewer aggravated and unhappy people because the leads were generated legitimately.

Conclusion

As compliance becomes more stringent around us, adapting early, building trusted partnerships, and prioritizing lead quality will be key to maintaining growth and avoiding costly missteps. 

PX’s solution, Brand Explicit Consent, will seamlessly integrate with your existing lead workflows and allow consumers to give individual consent to your brand before their lead information is shared with you. Read more about it here>>