2 Aug 2010
“Flight to Compliance” and LeadsCon East Insights
If the theme of the 2009 LeadsCon East was “Flight to Quality”, then I would say the theme of the 2010 NYC LeadsCon East was most definitely “Flight to Compliance.” The recent proposed amended regulations to the Higher Education Act of 1965 announced by the Dept of Education targets for-profit colleges and definitely shaped the discussions of this LeadsCon conference. In fact, the only other topic of discussion that came close to compliance in number of mentions was the presence of a new company in our space named Lead Beaver. Sorry readers, I won’t go there.
Compliance issues have always drawn attention in our industry but in light of these proposed regulations they have become even more illuminated. The proposed regulations would “provide additional guidance to institutions to ensure that marketing materials and statements are an accurate representation of the institution.” And maybe more important, the proposed regulations clarify the definition of the term “misrepresentation” to include “any false, erroneous, or misleading statement made by one of its representatives, or any ineligible institution, organization, or person with whom the eligible institution has an agreement.”
What does that mean for schools and their partners? It means that compliance is a concern on both the “Buy” and “Sell” side that must be addressed. On the “Buy” side, schools and agencies must keep an eagle-eye on their lead suppliers and publishers to ensure accuracy and maintain integrity of their school’s related copy on ads, landing pages and dynamic forms. Buyers are implementing strategies that include: automated monitoring with screen shots of lead supplier’s forms, compliance scoring of traffic sources, and customization of compliance rules and rule weightings on a per program basis.
On the “Sell” side, aggregators and publishers must be ever watchful to comply with the marketing guidelines provided by the schools and agencies they partner with or they could find themselves ultimately responsible. The potential “damages” for misrepresentation could represent entire tuition program/degree tuition, or at least the student loan amount of all those students who responded to the misleading copy. This has the potential to mean fines totaling tens of millions, or hundreds of millions, for some of the larger for-profit universities.
That issue leads to another very important discussion on compliance monitoring taking place among the largest companies on the “Sell” side–about how exactly to enable greater transparency for their clients without giving away their “secret sauce.” The leading sell-side companies do believe greater compliance monitoring and lower tolerance for misrepresentation is the new way of life. But, it needs to be done in a way that protects their proprietary marketing strategies including their publisher network list. The requirements for greater transparency will make it easier for buyers to optimize out non-compliant lead sources and create opportunities for reliable, compliant lead suppliers to earn larger lead caps and higher CPLs. No longer will the “good guy” lead providers need to subsidize the shady players.
While it may seem a daunting task, adhering to compliance issues doesn’t necessarily mean big changes in how most for-profit colleges approach their online marketing campaigns or how they work with their partners. There are technologies available that meet these demands that are turn-key and rich in data and alerts to keep compliance issues at bay, like PerformMatch™ — sell-side friendly, leveraging either a JavaScript deployment or a less invasive crawl solution. This is true compliance monitoring for schools that goes well beyond the screen shot to track individual violations of misrepresentations. (You didn’t think I could get through this without one plug for PerformMatch™, did you?)
The “Flight to Compliance” will definitely re-shape the Lead Gen industry in the coming year and I believe make us stronger and more focused on delivering top marketing value for our clients.
