The Education Business Blog

ISTE's National Education Computing Conference (NECC) 2008 is in full swing in San Antonio.

The Education Technology maven's tribal gathering is bigger than ever. A sign over the entrance reads "The Worlds Largest Education Technology Exhibit." That's a Texas sized ambition.

Here are a few impressions from day one. I'll write a more detailed analysis after the show closes.

There is a huge amount of energy here. The show floor was thronged until closing and sessions are well attended. Even the Press Suites are jammed. Oddly, the scene on the Riverwalk tonight was a bit subdued (I don't know if that is because people were tired from a long day or if we just missed the big party).

The electronic whiteboard guys rule the roost. It appears that Promethean (who has the most prominent exhibit at the show) is spending well over $100k just to have staff here. Smart has a big presence as do RM and all of the players in that space.

Meanwhile the computer companies are largely AWOL. Apple doesn't even have a booth.

Who is making the smarter decision? Are the whiteboard companies making hay while the sun shines or are the computer guys moving all their spending to the web where they can reap the rewards year round rather than over 3 days?

There are still lots and lots of really interesting little companies springing up - ed tech is a lively sector. While education funding may be static or down slightly the ed tech niche is up considerably. This is based on both the number of attendees and the word from vendors.

Am I getting older or is the hall getting noisier? It seemed to me that the noise level is getting ratcheted up as more people do booth theaters with mic'ed presenters. Part of this is just the high level of activity on the show floor, but some of this is an escalating problem that will spell trouble in the long run. Vendors need to have consideration for each other and for their prospects. One large whiteboard vendor that had a huge staff presence (ahem) was making so much noise for most of the day that it was hard to conduct a conversation two aisles over. Ultimately this will drive people outside for some peace and quiet. Oh, and you kids stay off my lawn.

San Antonio's exhibit hall has a weird layout. It is so long and twisty that it takes forever to get from one end of the show to the other. This didn't seem to hurt booth traffic, but it did make finding people a real pain in the rear.

So far it is shaping up to be a great show. All Y'all come back and read more about it later.

Bad marketing comes in two flavors. There is poorly executed marketing that no one notices. Then there is insincere, dishonest, and misleading marketing that everyone notices. The first kind is a waste of your money, the second kind gives marketers a bad name.

I've written elsewhere on finding a good target market, selecting a winning brand promise, and engaging in conversational Web 2.0 marketing. If you do those things well you can largely avoid execution error.

Today we focus on an example of the second kind that was so breathtakingly awful I had to backtrack and take a picture of it.

This idiocy was on display outside of a jewelry store in the Houston airport last week. I'm not going to name the store - it would only encourage them. Lets look at what is wrong with this.

First - they actually have a stunningly simple promise - and that is powerful. Everyone likes a deal and if you have been away from home for a week or two a little jewelry would help ease re-entry. Of course one's next thought is that they just jacked up the price on everything by 50% - so as promise it rings of insincerity. This is one step above the rug store in my old New York neighborhood that attracted tourists by "Going Out of Business" for the entire two years I lived there.

Second - they trumpet their insincerity with the "a few exclusions apply" small print at the bottom. They picked a promise they had no intention of actually delivering on - and they are open about that. This is a really bad idea.

Good marketers, sincere marketers, pick promises that the company can live up to. The goal is find something that you can organize the entire business around - even if it doesn't end up as your slogan or in your advertising. McDonalds does affordable family food really well. Wal Mart delivers low prices. Pearson has one of everything you might need in a classroom (or they will buy it soon).

If these weasels really wanted to deliver on this promise here are a couple of things they could do to live up to it.

1. Actually price things at roughly 50% of their competitors - and have display ads the show comparisons to prove it to you.
2. Get rid of the items they are excluding - that way they can eliminate the small print retraction.
3. Have a price guarantee - if you find it at another jewelry store at list price for more they will match whatever half of that is.

I would rewrite the add to say "Lets keep it simple, half off everything. We'll prove it and we guarantee it."

Barring these actions all we have here is the kind of sleazy marketing that gives all marketers a black eye. If they can't live up to this then they should keep looking for another promise that meets an urgent need of their target market. I guarantee there is something else they could do.

My guess is that the lie is so transparent that the campaign isn't even working very well for them. What a waste.

How are education publishers reacting to the economic downturn? Guest blogger and PR maven Charlene Blohm shares some concrete examples of steps companies are taking to trim expenses.

Part 1 - Education Spending & The Economy - Survey Results
Part 2 - Education Funding Market Dynamics - By Doug Stein

By Charlene Blohm, President C Blohm & Associates

District budgets are tight - many schools have already lost the music teacher, the art teacher, the band teacher, the librarian. Left with few other places to cut, two elementary schools near us will be sharing a principal next year. Districts seem to be delaying major purchases and upgrades, especially with administrative or support systems (those that aren't directly tied to student instruction).

How are companies reacting? More than one company has adjusted its sales forecasts down based on decreased spending. The major sales they were hoping to close yet this school year are being delayed, with the forecasted income moving to the next school year.

As a result here are some of the cost saving actions we are seeing across the market.

• Booth sizes at trade shows are a tad smaller - I've seen some movement where last year's 80x80 became a 60x60 this year, or 40x40 became 20x20, etc.
• Also, fewer staff are working trade show booths. Travel is down no matter how you look at it - flights are dang expensive, and often hard to find depending on where you need to go. And that applies to vendors as well as educators.
• There has been an up-tick in direct mail - people weren't getting the results they wanted from what I bet they thought were going to be "free" email campaigns. Even with the postal rate increases, people are blending the two more now than they were a year ago.
• People are stretching advertising dollars with more online purchasing. In fact, some folks are now online-only advertisers.
• There seems to be less money being pumped into product development, and the time for a product to prove itself in the marketplace is getting shorter and shorter. That's been happening for awhile now, so this is not necessarily related to the current recession.
• We're getting more phone calls from overseas prospects. I'm not sure if that's a function of our reputation (we've been doing that for years) or the economy - but I think it's safe to say that foreign companies aren't afraid to spend money on product development and marketing.
• In recent weeks, it seems that people are finally starting to think Web 2.0. I've had more conversations about keywords in the past two months than in previous two years. That signals to me that people are keen to make sure their name is up in bright lights - meaning they need the leads and visibility in a way they didn't before; I don't think there's just a sudden interest in Web 2.0 on its own merits.

Charlene Blohm is the President of C Blohm & Associates a full service Public Relations firm focused on the education market.

Today a look at education funding in the current economic crisis from guest blogger Doug Stein. Doug details how the market will react over the next two years and then lays out an interesting theory about how districts will bifurcate into factory and craftsman models on the rebound. Doug is one of the smartest thinkers in the business. His consulting company is Memespark.

Link to Part 1 - Education Spending and the Economy

By Doug Stein

Education budgets will go through three phases in this business cycle.

Phase 1 - In response to a rapid decline in local property taxes, K12 spending will pull back significantly. Everything outside of basic literacy (and possibly Math) will drop pretty hard for about 2 years. It's possible that "oil/energy" states will invest more, but those investments will depend on visionary leadership at the state level.

Phase 2 - The next administration will make significant changes (possibly even "scuttling/gutting") the NCLB regime. This will lead to a bifurcation of the market into two big pieces:

a) Districts dependent on Title I (mostly urban) which will revert-to-form and do what they had always done (use comprehensive basal textbooks to compensate for uneven teacher quality). Teachers will generally teach to the text/test. As always, there will be pockets of innovation, but for the most part, the faculty will hunker down and wait for retirement.

b) Districts that don't need Title I will be able to redirect their efforts away from Average Yearly Progress (AYP - which was a bit of a distraction for them). Many will leverage their investments in data-driven decisions and move to a "growth model" - trying to measure value-add for each student (because the parents and local taxpayers will demand proof that the investment is being well-spent).

In states where local taxing authority is restricted based on "equity" arguments, there will be major battles to keep K-12 funding from sagging. As the funding slips, so will the central state control of curriculum. (No pay, no play.)

Phase 3 - As funding returns (2010+), the schools and districts which have had some success will be empowered to try new curricula and new technologies. In particular, some companies are going to figure out how to apply social networking tools to enable the formation of "practice improvement networks". Some of these will be accredited professional development - usually a blended model. Some of these will be content creation focused - similar to a blog with an authorial voice and community participation.

Maybe someone will learn from what Flat World Knowledge is attempting in higher-ed (whether FWK succeeds or fails) and figure out how to build a profitable business where "tentpole authors" attract a community that develops and increases the value of new educational content - and where the community is truly a "community of best practice."

In short, I suspect that after a big dip in funding, we'll see market bifurcate into "factory" and "craftsman" models. Factory districts will look to big publishers and demand complete solutions (SIS + LMS + content); craftsman districts will look towards more "Web 2.0" horizontal collaboration with "just enough" data management to generate metrics that substantiate value-add. Content will come from the more innovative supplemental publishers (if they can adapt to a world of "users not units"); we'll also see a growth in user-generated content (with a revenue share model).

Why do I believe this?

I''ve seen clients serving the "must have" content areas growing quickly when they deliver a complete solution (content + data management + PD). Clients delivering "nice to have" or "innovative/unconventional" solutions are already seeing flattening sales.

In both cases, the sales cycles are growing longer and customers are having to cobble together money from more diverse sources. On the educator side, there have always been excellent craftsmen, but they are scattered across the US and have had a hard time receiving support from their peers (whom they couldn't find). They are starting to find each other.

Relevant Links:

COSL
Global Scholar
Wright Group

The Obama and McCain campaigns squared off at the Great American Education Forum sponsored by the Association of Education Publishers (AEP)* in Washington DC today. Educational policy experts from the campaigns addressed a wide range of positions the candidates are staking out from vouchers to the federal role in education.

Jeanne Century, Director of Science Education, University of Chicago represented the Obama campaign and Lisa Keegan, former Arizona Superintendent of Public Instruction represented Senator McCain. A panel of publishing industry experts** posed questions followed by a press conference. This is the first head to head discussion of education priorities between the two campaigns.

Given that Education is consistently rated as one of the top 2-3 issues (Pew May 29th) it is surprising that it hasn't been more visible in the campaign trail so far. The forum was valuable because differences in approach, philosophy, and policy emerged during the discussion.

On most of the issues the differences between the candidates positions are more matters of emphasis. Generally speaking the McCain position is that we already know what works, we just need to let the states sort that out and help them do more of it. Obama wants to take a more pro-active and comprehensive approach to addressing not just K12 but lifelong learning. Both camps support helping teachers be more professional and helping them follow best practices that help kids prepare for the 21st Century.

Follow below the fold for a detailed look at the positions of the campaigns. RSS readers click through for the full article.

Continue reading "The Great Education Debate - Obama vs. McCain at AEP" »

Yesterday I moderated a panel at the Association of Education Publishers meeting in Washington DC on innovative business models for education companies. The panel was made up of:

• Martin Knott, President Moodlerooms.com
• Joe McDonough hotchalk.com
• Mark Tullis, Learning.com
• I represented two of my clients - WeAreTeachers.com and Whyville.net.

We talked about subscription based models, an iTunes like model for instructional content, open source SaaS, embedded assessment, and Micro-distributorships. All of these are new to the education market. The panelists shared lessons learned from pioneering these approaches.

The slides from the presentation are in the attached file (3.7mb download)

AEP08-Pricing Models.ppt

How will the economic downturn affect education budgets? How are executives at publishing houses and education technology firms planning for the recession?

Education Week noted a couple of weeks ago:

"...states across the country are confronting deteriorating budget conditions that have tied the hands of legislators and governors hoping to spare K-12 education...Altogether, the 2009 budget gaps—the difference between what states are expected to collect in revenue and what they’re expected to spend on services—will exceed $26 billion, the NCSL says."

I recently conducted an informal poll of 30 Education Industry executives on this topic. They expect that the impact will be far more immediate than past downturns but generally they expect it be moderate.

Most of the respondents are President or Vice President level executives. They come from a nice mix of large and small companies and a combination of print, education technology, and companies that serve those companies. This is not a scientific survey, take it as a directional pulse of what people are thinking as they do their business planning for the 2008-2009 school year.

In today's post I share some of the high level findings. In the next few posts we'll hear the detailed comments from some of the respondents to give you a more nuanced view of the data.

Across the Board - Pessimism

The is an almost universal expectation that the downturn will affect education budgets. 23 out of 30 expect a negative impact on business. Not a single respondent expected an increase in spending and only 7 said the market would remain flat.

Immediate Impact - Something New

Perhaps the most significant finding is that 63% expect the impact to be either immediate (they are already seeing it) or in the next six months. This is a big shift from past downturns where it took 18 months for the downturn to flow through tax receipts to school budgets.

In part this is attributed to the heavy reliance of many districts on local property taxes. With housing prices dropping across the board it is clear locally what the impact will be. Because schools will always try to avoid laying off people if they can many companies saw cutbacks as far back as last fall as districts anticipated lower 2009 budgets.

Another interesting insight is that ed-tech companies think the impact will be longer term while the print companies expect it to be more immediate. My guess is that seeing a couple of adoptions postponed really rocked the print world.

One additional reason cited for a more immediate impact by several people was the impact of increased prices for fuel and food.

Several respondents noted that Federal spending will remain constant or increase after the election in the fall. The downturn will be concentrated in the 88% of education spending that comes from state and local taxes.

Impact Will be Mild

The good news is that the general expectation is that the downturn will be relatively mild. Only 8 of the respondents expected it to be a significant downturn. Several people noted that the impacts are being felt in 23 states this time as opposed to 48 in 2001.

Folks who thought it would be mixed expected to see some areas of their business doing better (e.g. supplemental) while others were challenged to make the number (e.g. big ticket items).

This is one area where there was a real divergence between the largest companies and the rest of the market. 6 of the 8 people who think the impact will be significant are with very large firms.

Districts Will Delay Big Decisions

One explanation for the pessimism of the large companies is that people are seeing districts delay or defer large new projects - even adoptions. This would have a disproportionate impact on the largest companies. Smaller company's products fill in gaps and are easier to justify right now (as long as they target an urgent need). Several respondents noted that they are already seeing this in the decisions districts are making today about the 2008-2009 school year.

About the Respondents

I contacted 74 people on my LinkedIn network and 30 responded.* 67% are Executives with a specific industry focus, 23% are consultants who look across a wide variety of companies and the other 10% were Line Managers or Sales Reps.

Responses came from a wide variety of companies.

Industry Services includes management consultants, list providers, market research, and executive recruiting.

We also got a nice mix of company sizes.

*If you are interested in participating in future straw polls lets get connected on LinkedIn.

"A Cranky, Skeptical, Loudmouth looks at Social Media Marketing" is a little rain on the "Conversation Economy" parade. It was written by Bob Hoffman over at Copyblogger. The 55 comments are as good or better than the article itself (alert the Irony Police).

"You and I are web geeks. We spend way more time than we should looking at computer screens. We are not normal. Especially you. The biggest mistake any marketer can make is marketing to himself, i.e. assuming his customer is just like him. They’re not and they never will be."

I can't disagree with that.

I like his definition of interaction as well.

"...the ability to interact with the content of the medium, not just the medium."

Changing the channel doesn't count. Adding a comment does.

The metrics are trickier. Using banner ads and click through ads as metrics is a red-herring. Those are old media dressed up in new clothes - kind of like running plays in TV. Of course they suck when compared to traditional media.

He also points to how few people are doing social media well and disparages any positive anecdotal evidence as outliers. But early in any transition far more people are failing at something than succeeding. Even after the transition has occurred more people are failing than succeeding, the ratio just improves over time. This isn't a great metric either.

What would be a good metric? I would like to see an analysis of the performance of companies in traditional markets that have invested in social media compared to their peers. We'd need to look over 2-4 years since community building takes time. No, this would not be perfect, but it would be better than what has been used to date. If you know of anyone who has done this research please share it in comments.

Perhaps by biggest beef with this outlook is that it takes an absolutist perspective - I hear this all the time from clients when I advocate a social media investment. People jump to the conclusion that in order for social media to succeed all other marketing forms must fail. The reality is just the opposite - we always find a niche for new tools AND we never toss the old tools. Just because a company is investing in social media doesn't mean they don't need to do good old fashioned trade-shows and advertising. The relative mix will change towards what is generating the highest return and every where I've seen it used well social media generate a very high return indeed.

I think those of us advocating social media need to take thoughtful critiques like this one very seriously. If we can't convince the skeptics amongst us then we have work to do. If we are going to be intellectually honest we also have to consider that they might be right. A rigorous debate is best way to sneak up on the truth.

PS - As an FYI Copyblogger is my favorite site for blogging tips and ideas.