Why A Goat Farmer Ranks Business Schools

There it is: lead generation. On BestCollegeReviews, Sparacio and Prato lay out, in a preemptive defense of their rankings, the basic revenue model for their lead gen business. “There is a lot of corruption in the world of online rankings and we want to be forthright about how our business model works,” text on the site says. “Best College Reviews has partnerships with over 400 colleges and universities and those schools pay us when a student requests information.

“However, these partnerships do not, and never have, influenced our rankings. We regularly get requests from schools to be added or moved up in our rankings and we always refuse.”

NEW-SCHOOL MARKETING MADE EASY VIA THE INTERNET

Lead gen falls under the umbrella of content marketing, the new-school practice of seeding the internet with material that snags viewers’ attention and guides them to particular websites. With lead gen sites such as SuperScholar and BestCollegeReviews, every time a visitor links to a featured school’s dedicated page and provides contact information, that’s a “lead” the school pays for. SeaWaves, in an announcement about the birth of  a new website, TopCollegesOnline, describes it as a service to prospective students, and as a venue allowing the company to “focus on lead generation opportunities in the profitable higher education industry.”

Kenan-Flagler, of course, sits on the high hallowed ground of that industry, in an extremely competitive business-education environment. Its MBA@UNC program is only three years old, but it’s become popular and is one of three online MBA programs at a Top 20 U.S. school, besides Carnegie Mellon and Indiana. According to IRS filings, revenue from Kenan-Flagler’s online education reached $2.85 million in 2012 from $920,000 in 2011, the year its online MBA program started. The number of online MBA@UNC students, now paying $97,000 each for the degree, has grown to 450 from the first cohort of 19 who started in 2011, with students currently coming from 35 countries.

TACTICS CONDEMNED IN SENATE REPORT

What’s a first class, legitimate academic player doing in a place like this, with such for-profit scrappers as Phoenix, Walden, and Capella? Phoenix, Capella and Walden – the latter two making frequent appearances, with lead gen links, on Sparacio sites – are highlighted in a 2012 Senate Education Committee report profiling 30 for-profit education companies. The report notes that Capella, in 2009, spent nearly three times as much money on marketing than on student instruction, as did University of Phoenix owner Apollo Group, while Walden spent 41% more on marketing than on instruction.

“For-profit colleges gather contact information of prospective students, or ‘leads,’ by paying third-party companies known as ‘lead generators’ that specialize in gathering and selling the information,” the report says. “Among the 62 lead generators used by companies analyzed, the cost per lead ranged between $10 and $150. Lead generators advertise themselves . . . as a free, safe, and reliable way to get information about college.

“But lead generator sites generally direct students only to schools and programs that pay them. Lead-generation companies have a history of engaging in online marketing using aggressive and misleading methods. These marketing efforts continue to be a serious cause for concern.”

Micah Sparacio's farm animals enjoy life in rural Tennessee. - sparacio.org

Micah Sparacio’s farm animals enjoy life in rural Tennessee. – micah.sparacio.org

The National Association for College Admission Counseling warns, “Lead generation companies have capitalized on the interest in online education, offering a questionable ranking of the ‘top’ online schools or simply providing enrollment information about online colleges,” the association says. “A rankings methodology is the backbone of any rankings list. Don’t be fooled by vague descriptions of where the data comes from.”

Let’s do a little math to come up with a hypothetical lead gen income for Sparacio. Even if he’s making only $10 per lead and hits his 300-leads-per-month target, that’s $36,000 per year. If he ratchets up his game and hits his 900-lead mark, that’s $108,000 per year.

State of Tennessee records show Sparacio and his wife Stephanie, a licensed social worker, own their home, market appraised at $232,000, bought in 2011 for $27,000. The records show the couple also owns a nearby woodland of unspecified size appraised at $468,000, bought in 2012 for $270,000, and Sparacio owns through his company Mountain Enterprises LLC a two-acre plot with a 7,500-square-foot prefab building on it near Tracy City, appraised at $75,000, bought for that amount in 2013, plus a 1 1/2 acre lot close by appraised at $11,000, bought for $13,500 in 2013. Sparacio and his wife, according to New Jersey state records, also own a one bedroom condo assessed at $110,000 two blocks from the beach in Sea Isle City, home of SeaWaves’ Jersey Shore office, and Prato.

Prato and his wife Maureen, in Sea Isle City in the late ’90s, opened “Bagelritaville,” a restaurant apparently no longer operating. Around the corner from that location, the couple now own a rather grand, three-story, 3,300-square-foot house assessed at $1.2 million, on a sixth of an acre a block from Sea Isle’s beach boardwalk.

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