Posted on

A Window Into Ed-Tech Marketing Strategies During the Pandemic

How is COVID affecting ed-tech marketing?

Ed-tech firms across Europe mostly decreased their marketing budgets or kept them flat during the pandemic, holding back on new and aggressive ad campaigns during a historical period of business uncertainty, a new analysis finds.

But spending on marketing is expected to rebound to pre-pandemic levels — and signs of that are already emerging. 

Those are some of the takeaways from a new report released by European-based venture capital group Brighteye Ventures, which assessed the state of ed-tech marketing in a recently released report

The report is based on a survey of 55 education company chief marketing officers and founders, mostly based in Europe with a few from the United States, and it provides a look at how companies in the ed-tech sector adapted in trying to get the word out about their businesses during the heights of the pandemic last year.

Brighteye Ventures is an ed-tech venture capital firm founded in 2017 with a particular focus on investments in Europe. Last fall the firm announced it was launching its second fund, with a value of $54 million.

Among the key findings from the report: Ed-tech firms reduced marketing budgets across a range of customer target segments, from individual consumers to K-12 schools to universities. The category marked as “government,” which refers to departments of education in various European countries, showed the smallest decline. 

The report also found that ed-tech marketing budgets across acquisition verticals and revenue ranges represented 8.3 percent of revenue in 2020, compared with 11.6 percent the year before and 10.7 percent in 2018. 

Overall, 25 percent of respondents said their marketing budgets decreased by 10 percent to 50 percent due to the pandemic. Forty-two percent said their budgets remained the same, while 34 percent said their budgets rose.

David Guerin, a principal at Brighteye Ventures, said it was not surprising to see that ed-tech firms cut back on marketing during 2020. 

While getting the word out about products remained a priority last year, it was not a “top of the list” concern while businesses around the world were trying to figure out how COVID-19 would ultimately pan out, Guerin said. Other needs, such as managing cash and keeping employees paid likely trumped new ad campaign spending, he said.

But Guerin noted that marketing spending in the ed-tech sector will “definitely” rebound, with early signals of that already happening. 

“We are seeing it in our portfolio. Budgets are going back to where they were,” he said, adding that recent conversations with education companies show they are increasing marketing spends and once again experimenting with new approaches for customer messaging and acquisition. 

Organic Marketing Shows Its Value

During 2020, organic marketing — any free publicity such as word of mouth, webinars or content marketing — proved to be the most effective for ed-tech firms, per the report. About 68 percent of respondents, a more than 10 percent increase compared to 2019, said organic channels represented at least three-fourths of their overall marketing budget last year.

“I would have expected the paid marketing side of things to grow considerably during COVID,” said Guerin. “I was wrong. Organic is still king.” 

And during the pandemic, the main focus for ed-tech firms on the marketing front appeared to be lead generation and acquiring new customers.

The report shows that ed-tech marketing focused heavily on new customer acquisition.

Sixty percent of ed-tech firms that are targeting consumers listed acquiring new customers as their top objective last year. That figure increased to 67 percent for ed-tech firms focused on governments as their target customers. Among ed-tech firms that have governments as their target customers, 67 percent said acquiring new customers was their top focus.

Guerin said the expectation was that retaining existing customers would rank highest last year, but among companies targeting consumers only 7 percent listed that as their No.1 priority. Only 12 percent of ed-tech firms selling to governments said customer retention was their primary objective last year. 

The second priority for ed-tech marketing during the pandemic was building brand value. About half of ed-tech firms targeting universities listed this as their top priority. 

“Do not underestimate the value of branding, and the importance of having a good brand with messaging that resonates with clients,” said Guerin. 

The report also highlights what ed-tech marketers feel are the biggest barriers to success. An inadequate budget topped the list. That comes in stark contrast to results from the same survey in 2019, when ed-tech firms listed inadequate budget as the least significant barrier of four available options. 

One of the other biggest obstacles for ed-tech marketers is a lack of automation of processes, according to the survey. That means ed-tech firms are seemingly missing out on the advantages that come from marketing automation tools, such as automatic client emails and follow up messages, that decrease the time marketers spend on manual tasks.

“I would have never expected this to still be one of the biggest obstacles for marketers,” said Guerin, “but a lot of things are done manually and systems are not connected when they should be connected.” 

Image by Getty


See also: 

Posted on

A Window Into an Early Education Company’s Plans for Growth

Parents in the preschool market are becoming more “self-directed and intentional” in seeking out services, says Roderick Morris, the president of Lovevery.

Schedule a Tour

Join us to get access to the rest of this premium article.

Already a member? Log in.

Posted on

How One Ed. Company Is Growing Internationally, Despite COVID’s Disruption

For Nearpod CEO Pep Carrera, the upside to bringing his ed-tech product to Europe, the Middle East, and other foreign markets has far outweighed the risks.

Schedule a Tour

Join us to get access to the rest of this premium article.

Already a member? Log in.