Data that drives your business. Marketing that drives results.

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Data that drives your business. Marketing that
drives results.
Data that drives your business. Marketing that
drives results.

• A Business GPS for Navigating the K-12 Market in
  an Uncertain Economy
• Tata Interactive Learning Forum
• October 17 2008
• Nelson B. Heller PhD President
• The Heller Reports a QED Company
• Anne Wujcik Managing Editor and Research
  Principal
• The Heller Reports/QED

2
Data that drives your business. Marketing that
drives results.
Data that drives your business. Marketing that
drives results.

• Overview K-12 Funding Drivers Enrollment
  Adoptions
• Anne Wujcik
• Managing Editor and Research Principal
• The Heller Reports/QED

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Education Funding Landscape

• Total Taxpayer Investment in K-12 Education 540
  billion per year
• State Funding 47.6
• Local Funding 43.5
• Federal Funding 8.9
• Source National Center for Education Statistics
  (NCES) and National Education Association
  estimates 2006-07

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Education Market Drivers

• 2007 2008 2009
• Funding Environment
• Adoptions
• Enrollment

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Enrollment Growth

• 
  
  Source NCES

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Adoptions

• 2008 Bid Year for 2009 Purchasing
• California K-8 reading/language arts
• Florida K-12 language arts
• Texas K-5 reading/language arts
• Math ID KT NV NC SC OR
• 09 AL FL WV
• Science MS NV TN
• 09 NC OR VA

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State Financial Outlook

• With the economic downturn now a reality state
  fiscal conditions are weakening
• FY 2007 Revenue Collections
• 23 states - above forecast (42 states last year)
• FY 2008
• 20 states face shortfalls totaling 13 billion
• Ed cuts for AL DE FL KT ME MD NV PA RI
  TN VA
• FY 2009
• 26 states project shortfalls totaling 40 billion
  in 2009
• If downturn continues 35 to 40 states will face
  budget cuts in 2009
• Locals hurt by property tax slowdown rising fuel
  costs
• Source National Conference of State
  Legislatures State Budget Update June 2008

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Federal Funding

• Operating under a continuing resolution through
  March 6 2009
• Holds funding steady at FY 08 level
• Possibility of using a CR for all of FY 09
• Before the current fiscal crisis
• McCain favored freezing all domestic
  discretionary spending pending a review strong
  emphasis on the states role
• Obama proposed 18 billion a year in new spending
  on preschool and K-12 programs and well as
  addressing the underfunding of NCLB

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The Truth About the Recession
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Data that drives your business. Marketing that
drives results.
Data that drives your business. Marketing that
drives results.

• Navigating a Down Economy
• Nelson B. Heller PhD
• President
• The Heller Reports a QED Company

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Insights from Previous Downturns

• Understand the unique factors
• Get ahead of the curve
• Cut costs
• Improve sales/marketing ROI
• Build for the future

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Whats Unique

• NCLB
• Stressed fuel and transportation budgets
• Property tax safety valve restricted

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Getting Ahead of the Curve

• Objective cost cutting
• Streamline duplicative operations
• Sampling - illegal copying
• Communicate with your team
• Dont cut product quality
• Improve sales/marketing ROI

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Boosting Sales/Marketing ROI

• Save money on campaigns
• Increase ROI for campaigns
• Improve mining of customer data
• Increase insight into whats working and what
  isnt
• Accelerate response to campaign results
• Reduce customer irritation

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Market Database Issues

• Issue Marketing Data is in an accounting or
  other legacy system
• Concerns
• Objectives of accounting are not the same as
  marketing
• Interface unlikely to be marketing friendly
• Likely requires technical expertise to interact
  with
• It is almost a given a single customer can be
  represented by several accounts which affects
  both targeting and analysis
• Solution
• Need to extract and periodically update marketing
  data into a separate database

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The Environment
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The Environment
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The Environment
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The Environment
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Market Database Issues

• Issue Address data are not corrected in main
  system after campaigns
• Concerns
• Too many undeliverables
• Moves are not caught unless new order comes
  (which is probably in a new record
• Solution
• Use of systems such as the USPS ACS provides
  electronic files of changes
• A separate marketing database might make it
  easier to update

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Market Database Issues

• Issue Data are not being gathered
  comprehensively
• Concerns
• Results in a sparse data set that significantly
  limits the ability to target
• Solution
• Its difficult if not impossible to go backward
  to remedy
• Focus on a few key elements and ensure they are
  being gathered fully
• Expand the element list as time goes on

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Market Database Issues

• Issue Data Entry of much information is
  free-form
• Concerns
• Errors with result in unusable and often
  uncorrectable information
• Fields may be used be used for notes not data
• Entry of key elements may not be required
• Solution
• Eliminate as many free form entries as possible
• Lookups should be standard
• Have forms guide the process as if they are a
  customer

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Market Database Issues

• Issue Main method of measuring success is by
  response codes or special URLs
• Concerns
• There are so many entry points it will almost
  assuredly under-represent results
• Solution
• Define base periods and measure sales and
  responses of campaigns against a base
• Gather the codes but use only as one measure

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Market Database Issues

• Issue Clear definitions of key concepts and
  coding standards do not exist
• Concerns
• Even such basic terms as customer and prospect
  can mean different things to different
  people/groups
• This can result in erroneous analytic results
  list definition
• In most cases it can not be corrected
• Solution
• Dont trust to verbal. Have written definitions
  and ensure all who use the definitions are aware
  of and use the definitions be they in marketing
  sales accounting or IT.

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Market Database Issues

• Issue Marketing may have to request all list
  pulls profiling and analysis which require
  technical intervention
• Concerns
• Slows down definition and analysis resulting in
  missed opportunities and the lack of ability to
  construct what-ifs
• Solution
• Marketing needs a simple enough system for
  constructing what-ifs and list development
  without technical intervention

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Level the Playing Field
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Data that drives your business. Marketing that
drives results.
Data that drives your business. Marketing that
drives results.

• A Glimpse of the Next 20 Years

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Tomorrows Big Ideas

• Digital Mobility
• Distance Learning
• Platform wars next generation portals
• OS/Web 2.0 business models
• Energy and Climate

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Digital mobility 1989
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and today
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Kindle e-Book Reader
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Kindle Smart and Wireless

• Free EV-DO connectivity
• 1-click wireless purchasing
• 200-600 book capacity
• Newspapers blogs web search
• Dictionary notes bookmarks clippings search
• Low power consumption

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E-Ink/ePaper Display
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Is Kindle books as iPod media

• Significant but not explosive sales
• Bezos keynote at Book Expo America
• But its not (yet)
• Color
• Very interactive
• a Netbook

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Distance Learning Online Learning

• US K-12 market trends
• Accelerating internationally
• US K-12 acquisition flurry
• Market drivers
• Blended/Hybrid Learning
• implications

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K-12 DL/OL Insight
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US K-12 DL/OL

• 50 mil/yr growing at 30
• 42 states w significant OL pgms
• 26 state-wide/state-led VS
• 2014 10 HS courses OL
• 2019 50 HS courses OL
• 72 of DL districts expanding OL in coming year

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Accelerating internationally

• South Korea
• European Union
• Mexico
• Singapore
• India
• China

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UK-China Deal
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US K-12 acquisition flurry

• GlobalScholar.com (Knowledge Universe/Ignition
  Partners)
• Insight Schools (Apollo Group/U of Phoenix)
• Advanced Academics (DeVry)
• U of Miami HS (Kaplan)
• eCollege/eClassroom (Pearson)
• Penn Foster (The Wright Group)

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K-12 Market drivers
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Why bother

• ADA counter-recessionary
• Credit recovery eclipsing AP
• Legislators/public motivated
• Real estate leverage and scalability
• Efficiency/Effectiveness

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Blended/Hybrid Learning Cinderella

• Digital classrooms in B/M facilities
• Mainstream not alternative -opportunity
• Flexnet the online education with class (U of
  Phoenix)

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implications for the K-12 market

• Books digital resources
• Learning module structure
• LMS/CMS
• Not just anytime anywhere its any way too
• Content aggregation no longer viable business
  model

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Hurdles

• Teachers and Unions
• Shortage of qualified instructors
• ADA funding competition
• Bandwidth
• Locally authored curricula
• Exam proctoring

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Platforms next generation portals

• Your future home
• Escalating capabilities spectrum
• Growing list of players
• Veterans
• Newbies
• Business implications

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Chrome blurring Web/Local boundary
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Desktop Web App Shortcuts
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Google Docs Spreadsheet App
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Platform Capabilities Spectrum

• Single sign-on and user authentication
• SaaS or local
• Collaboration communication social networking
• Content archives lockers e-portfolios
• Rich multimedia

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Capabilities - more

• Scheduling
• Courseware authoring
• Assessment
• Off-line functionality
• Portable desktops
• Students educators parents
• API friendly
• Business terms

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Veteran players

• Blackboard
• K12 Inc.
• Desire2Learn
• Angel Learning
• eClassroom
• LearningStation
• Moodle
• Sakai

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Blackboard School Central
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Newbies

• Follett Digital Classroom
• IQ-ity
• Agilixs GoCourse
• Etechs Studywiz Spark
• VIP Tone
• Editures MySuite
• Drupal

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Platform wars business implications

• Compatibility
• Pedagogy
• Software architecture
• Business models
• Mixnmatch
• Platform intermediation
• Support
• Auditing

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OS/Web 2.0 business models

• Open Content Failure to Thrive
• NROC Natl Repository of Online Courses (MITE)
• Open API opportunities Facebook

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Open Content Failure to Thrive

• Quality
• Coverage
• Standardization
• Alignment
• Marketing/sales
• Customer service support
• Professional development

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Monterey Institute for Technology and Education
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National Repository of Online Courses (NROC)

• Open Educational Resource (OER)
• Courses contributed by academic institutions
• Editorial investment
• Income from Institutions
• Two parallel value propositions

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NROC Editorial Investment

• Editorial accuracy
• Learning module structure
• Content correlation and alignment
• Assessments
• Problem sets
• Teachers guides

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NROC Institutional Value Proposition

• Student/Instructor proposition plus
• High-quality content in full-course sets
• Maintenance
• Compatibility with leading LMS/CMS enterprise
  systems
• Customizable delivery site
• ASP/SAAS hosting

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Open API opportunities

• Facebook partners
• Cramster.com
• Blackboard.com
• Scholastic

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Facebook
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Cramster.com/Fb
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Blackboard.com/Fb
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Bb Sync Fb User Posts
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Energy and Climate Business opportunities
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Green is the new gold
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Finding Opportunities

• Virtualization
• Cloud Computing
• Stressed School Budgets
• 21st Century Skills STEM
• Sustainability
• HESA Federal Funding

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Contact Info

• Nelson B. Heller PhD
• President The Heller Reports a QED Company
• 858-720-1616
• nelson_at_HellerReports.com
• Anne Wujcik
• Managing Editor and Research Principal
• The Heller Reports/QED
• [phone]
• anne_at_HellerReports.com
• http//HellerReports.com