Exposing Success Academy Marketing Strategies Harmful to the Public Good

The underlying concern, however, for many is that Success’ intensely focused financial investment in marketing is reflective of their priorities lying with private goals rather than public aims. After all, it can be argued that the money spent by Success on marketing could, alternatively, have been devoted to educational objectives or support. In fact, on the donation section of the Success Charter Network website, the organization opens by stating, “You can tell a lot about an organization’s priorities by how they spend their money” (Success Charter Network, 2011b). This may likely be very true.

Success Charter Networks spent $1.6 million dollars on marketing efforts alone in 2009-2010, amounting to $1,300 per incoming student.

According to Annual Reports available on through Success Charter Networks, each of the seven Success charter schools in New York City spent, on average, $13,727 per pupil in 2010-2011 (Success Charter Network, 2011a). That means that, if the marketing budget remained roughly the same, 9.5% of the per pupil budget went to marketing and recruiting efforts—a number which is on par with spending of big CPG companies nationally.

Above are excerpts from the article below co-written by Catherine DiMartino who moderated the debate I took part in with a NYC Charter School Center rep on Oct. 26 at Hofstra University. Catherine sent this to me after the debate. I wish I read it before as it contains so much information I would have used. Catherine was totally objective in how she moderated I might add. 

NOTE: See video and commentary on the disruption at Eva's bait and switch tactic in Cobble Hill in my follow-up article.

TC Record Commentary on marketing and charters

Corporate Style Schooling: Marketing for Private Gain Rather than the Public Good

by Sarah Butler Jessen & Catherine DiMartino — October 04, 2011

In response to a recent article in the New York Daily News regarding the marketing expenditures of the Success Charter Network, this commentary discusses the growing push for public schools (particularly charters) to engage in marketing. The authors argue that this trend is a result of the new educational policy context of merged private- and public-sector worlds. Concerns are raised about the effects of embracing corporate models for educational reform.

In recent years, there has been a push to implement private sector strategies in the public education system. Some have argued to treat education “like a business,” and discussions of “return on investment” in education have become more common (Boser, 2011; Colvin & Snider, 2010). School systems throughout the country have implemented market-based reforms, and private companies have begun not only to invest in, but also to partner with (and even create) schools in the name of generating systemic change. This trend receives ample support from the federal government through its Investing in Innovation Fund and, more recently, though the federal “re-start” intervention model. Many schools in New York City, New Orleans and Philadelphia have corporate partners—EMOs, CMOs, and intermediary organizations — that shape the daily practices of public educational institutions. These partners’ influence ranges from providing technical support to the wholesale management of schools.

It should come as little surprise, then, when schools respond to operating within this new policy context of a “business-like” environment with “business-like” strategies aimed at helping them succeed in the marketplace. For example, the expansion of market-based reforms into public education has introduced the world of marketing to a new arena. A recent article published in the New York Daily News revealed that the Success Charter Networks spent $1.6 million dollars on marketing efforts alone in 2009-2010, amounting to $1,300 per incoming student (Gonzalez, 2011). This report incensed many public school advocates, and received targeted criticism at the recent “Save Our Schools” march in Washington, D.C. (Decker, 2011). But how unexpected or outlandish is this financial investment given this current policy context modeled after the private sector?

Marketing, of course, is a central component of private industry. The average retail company spends 4 to 6% of their sales revenue on marketing, while consumer package goods (CPG) companies spend 8 to 10% annually (U.S. Chamber of Commerce, 2011; Moorman, 2011). In the “brand-building” stage of product development, companies spend a great deal more on marketing efforts (U.S. Department of Commerce, 2011; Moorman, 2011). Think: the original rolling out of the Apple iPhone or the latest McDonalds’ 99 cent offering.

According to Annual Reports available on through Success Charter Networks, each of the seven Success charter schools in New York City spent, on average, $13,727 per pupil in 2010-2011 (Success Charter Network, 2011a). That means that, if the marketing budget remained roughly the same, 9.5% of the per pupil budget went to marketing and recruiting efforts—a number which is on par with spending of big CPG companies nationally.

Although charter schools are public institutions, many have embraced (and been embraced by) the private sector. Commonly viewed by the corporate world as “innovative” or “entrepreneurial” educational agents that break free of traditional bureaucracies found in public school systems, many charter schools have particularly drawn on financial and organizational support of private industries. Success Charter Network, for example, draws heavily on investments from large corporations, and their Board of Directors is largely made up of representatives from private corporations or investment firms (Success Charter Network, 2011b).

In the world of charter school marketing, Success Charter Network, of course, is not alone in drawing on the private sector. KIPP schools founders partnered with the founders of Gap, Inc. after Gap’s $15 million gift to launch the KIPP Foundation, which “was established help set up KIPP-style schools” (Kennedy School of Government, 2011, p. 2). Among other things, the KIPP Foundation spearheaded the trademark licensing of the KIPP name—a branding technique. Marketing efforts employed by others include sending monthly mailings of full color brochures to perspective students and their families, hiring part-time workers to target specific pools of applicants, transmitting personalized text messages to parents and advertising on bus stops (CellsTrust, 2010; Gonzalez, 2011; Medina, 2010).

Despite the recent merging of the education and business worlds, there are significant differences between the marketing of a CPG company and a public school. First, private companies have oversight systems in place to prevent the spread of misinformation or deception through their marketing materials. The Federal Trade Commission has governmental jurisdiction over advertising. Legal teams at major CPG companies work to ensure that wording of each marketing publication is not inaccurate or overstated. Companies can challenge claims made by competitors through the Better Business Bureau. Ads run on major television networks are additionally run through the network’s legal reviews.

At the present time, no such oversight exists for public schools. Principals, who are often charged with marketing and recruiting, are given little training on how to effectively, or accurately, portray their school in informational literature. Some research has shown that, in fact, schools have “glossified” their marketing literature to portray an image of the school (which may or may not be accurate) in order to attract certain populations )). Little research has examined the accuracy of the claims made in school marketing literature or the impact of such claims on the consumer – student and parent - experience, especially if hyperbole trumps precision.

Secondly, marketing practices from the private sector do not convert fluidly into the public arena of the educational system. At a very basic level, the purpose of a public school is to contribute to a public good whereas the purpose of private company is to build revenue. In the private sector demand can be met by increasing product and industries can expand by enlarging the consumer base. In public schools, the market is simply restricted. There are a set number of school-age children, all of whom are going to school, and each school only has a given number of seats. This creates incrementally increasing competition for specific schools, resulting in unintended complications.

Competition spurs innovation and improves practice, so school choice advocates claim. In the private sector, investing in marketing provides returns on investment through increases in sales and revenue. Research has shown that schools often begin to invest in marketing strategies, as school choice competition increases ). However, unlike in private industries, transferring portions of an institution’s educational budget to marketing can, in fact, detract from academic programming. Because public schools do not generally increase their income through marketing techniques, they do not see the same financial return on investment.

Where schools stand to profit from intensive marketing campaigns is through student enrollment. While distributing information about schools in a choice system is intended to contribute to creating a cohesive school community through student buy-in, or simply maintaining enrollment, research has shown that parents and students respond to marketing cues from schools, which can result in sorting by a variety of factors, such as socioeconomic status, race, or educational background ). Particularly with the intense pressure to meet accountability standards, there is an underlying danger that instead of focusing on improving educational practice, schools will compete for the most “desirable” applicants through increased marketing campaigns ).

It is possible that the quality of Success schools is superior to the public institutions from which they draw their students, and, at the very least, as a newer charter network they face hurdles of “getting the word out” about their schools. Yet, the marketing expenditures of Success Charter Network come as local public schools are facing extensive budget cuts. Extra ability to invest in marketing puts them at an advantage, whatever the quality of their product, raising questions not only about this inequitable distribution of funds, but also about the potential negative impact on neighboring public schools.

The underlying concern, however, for many is that Success’ intensely focused financial investment in marketing is reflective of their priorities lying with private goals rather than public aims. After all, it can be argued that the money spent by Success on marketing could, alternatively, have been devoted to educational objectives or support. In fact, on the donation section of the Success Charter Network website, the organization opens by stating, “You can tell a lot about an organization’s priorities by how they spend their money” (Success Charter Network, 2011b). This may likely be very true.

References
Ancess, J., & Allen, D. (2006). Implementing small theme high schools in New York City: Great intensions and great tensions. Harvard Educational Review, 76(3).

Boser, U., (2011). Return on educational investment: A district-by-district evaluation of U.S. educational productivity. Washington D.C.: Center for American Progress.

CellsTrust. (2010). Harlem success academy case study. Retrieved August, 16, 2011, from http://www.celltrust.com/products/sms-gateway/celltrust-harlem.html

Colvin, R.L, & Snider, R. (2010). Business leaders and the new education agenda: Investment in our littlest learners (A Hechinger Brief). Teachers College, Columbia University: The Hechniger Institute on Education and the Media.

Decker, G. (2011). Matt Damon criticizes Eva Moskowitz’s charters at D.C. rally. Retrieved August 14, 2011 from GothamSchools.org,

DiMartino, C., & Jessen, S. (2011). School brand management: The policies, practices and perceptions of branding and marketing in New York City's public schools. Paper presented at the American Educational Research Association, New Orleans, Louisianna.

Gewirtz, S., Ball, S., & Bowe, R. (1995). Markets, choice, and equity in education. Philadelphia: Open University Press.

Gonzalez, J. (2011). Success Charter Network has been just that for Eva Moskowitz but not for public schools, New York Daily News. Retrieved from http://articles.nydailynews.com/2011-07-27/local/29836796_1_success-charter-network-charter-schools-icahn-charter

Kennedy School of Government (2011). The KIPP schools: Deciding how to go to scale. Cambridge, MA: Harvard University.

Lubienski, C. (2005). Public schools in marketized environments: Shifting incentives and unintended consequences of competition-based educational reforms. American Journal of Education, 111, 464-486.

Medina, J. (2010, March 10). Pressed by charters, public schools try marketing. The New York Times, pp. 1, 3.

Moorman, C. (2011). The CMO survey: Highlights and insights, February 2011. Duke University Fuqua School of Business and the American Marketing Association.

Success Charter Network (2011a). Annual Reports. Retrieved August 13, 2011 from successcharters.org.

Success Charter Network (2011b). Ways of Giving. Retrieved August 13, 2011 from successcharters.org.

U.S. Chamber of Commerce (2011). Setting a marketing budget. Retrieved on August 13, 2011 from uschamberssmallbusinessnnation.com.

Cite This Article as: Teachers College Record, Date Published: October 04, 2011
http://www.tcrecord.org ID Number: 16556, Date Accessed: 10/19/2011 1:50:51 PM

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