Weighing The Pros And Cons Of Partnering With An OPM

March 29, 2019 Charlene Sterphone

online education

There’s no question online education is continuing to grow, and the world of higher education is changing to adapt to the online landscape. Some higher education institutions are investing time and money to prepare their programs for the online market, while others choose to partner with online program management (OPM) companies to launch or expand their online offerings.

According to an Inside Higher Ed article, ten years ago only three or four OPM companies existed. By July 2018, there were roughly 30 OPMs working with colleges to bring their programs online. As the OPM market continues to evolve, so have changes to OPM pricing structures. Originally, many OPMs required long-term contracts inclusive of revenue-sharing pricing models, with the majority of revenue often awarded to the OPM.

According to Dr. Joshua Kim, Director of Digital Learning Initiatives at the Dartmouth Center for the Advancement of Learning, “The old model of long-term contract lock-ins and lopsided revenue shares is beginning to erode. Nowadays, all OPM providers that I know are starting to unbundle their services. They are willing to build flexible partnership models that suit the individual needs of a particular school, rather than impose a rigid model of revenue share and contract length.” As more OPMs offer flexible pricing models, some larger higher education brand names, including Penn State University’s World Campus and Arizona State University, have made the decision to partner with them.

Results Of Colleges Working With OPMs

According to Eduventures research, schools working with OPMs have seen a five-year online enrollment increase significantly above colleges that have not partnered with OPMs: 43% online enrollment growth vs.15% at the undergraduate level between 2012 and 2016, and 34% online enrollment growth vs. 23% at the graduate level, during the same period.

Pros Of Working With An OPM

Aside from the promising results of the Eduventures study, many higher education institutions are drawn to OPMs because of their relative speed to market and ease in online program adaptation.

Expertise: For institutions without prior experience in online education, making the transition online can seem like an insurmountable task. Partnering with an OPM that has a proven track record can help alleviate this burden by leveraging the expertise of past successes.

Efficiency: Partnering with an OPM can help expedite the transition into online education. By providing a turn-key solution, OPMs have the ability to bring traditional programs online much faster than institutions working alone.

Lower Risk: By reducing the time and monetary investment involved in setting up online programs, OPMs help mitigate the risk of transitioning online. For revenue-share partnerships in particular, the appeal of not needing to provide up-front funding and not increasing fixed costs can be a major draw to higher education institutions.

Cons Of Working With An OPM

Despite the potential ease of working with an OPM, some institutions are hesitant to enter into partnerships and may be uncomfortable not being in total control.

Less Brand Control: Since full-service OPMs often require the management of everything from marketing to enrollment, OPM relationships sometimes result in inconsistent messaging.

Lack Of Transparency: With OPMs handling the marketing and recruitment for programs they manage, marketing strategies, channels and metrics are often not shared with their partner schools.

Opportunity Cost: While working with an OPM, particularly using a revenue sharing model, minimizes risk, it can also minimize reward. Depending on the contract specifics, half or more of tuition revenue may be going to the OPM.

Making A Decision About OPMs

According to Eduventures research, an estimated 10% of the higher education market (a few hundred colleges and universities out of the several thousand degree-granting U.S. institutions) work with full, comprehensive OPMs. The research indicates that the combined revenue of outsourced OPMs stands at roughly $2.3 billion and could grow 12% by 2020. As OPM services continue to evolve, each institution must carefully weigh the pros and cons of working with an OPM and determine what makes the most sense for their institution.

DMS Education Can Help

DMS Education can support schools directly or partner with OPMs to generate quality higher education leads at scale. DMS Education is an industry leader in matching schools with students who enroll and graduate. Using an extensive portfolio of owned-and-operated, education-focused properties and a diversified, multi-channel media mix, DMS Education provides predictable, scalable reliable education marketing to a long list of traditional and for-profit colleges, trade schools, community colleges, boot camps, continuing education providers, OPMs and agencies.

Contact DMS today to learn more about what DMS Education can do for you.

About the Author

Charlene Sterphone

Charlene Sterphone, Director of Marketing A focused and highly motivated creative thinker, Charlene Sterphone develops, executes and reports on strategic marketing programs surrounding lead generation, paid search, email, social media, mobile targeting, SEO and compliance as Director of Marketing for Digital Media Solutions (DMS). Throughout her diversified marketing career, Charlene has spent time in both the agency and direct corporate and start-up settings, including positions at Sparkroom, Education Dynamics and CBS Corporation, where she has seen success with digital and traditional marketing campaigns. As an analytical marketer, Charlene enjoys discovering new and innovative tools and techniques and using them to drive growth.

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