Oregon’s Step Back From a Branding Contract Doesn’t Mean Branding Is Dead

When the University of Oregon dropped its $3.4-million, multiyear contract with a national branding agency this month, it raised a lot of questions. William H. Faust knows this, because his clients, as well as some prospective clients, continue to ask them. “Everybody’s paying attention to it, because it’s high visibility and a big school and a big budget,” says Mr. Faust, managing partner of Ologie, a company that works with colleges to develop branding campaigns.

His clients want to know what, if anything, Oregon’s ending its contract means for marketing in higher education. Mr. Faust tells them that it is one contract at one university, and that the decision doesn’t signal a “this doesn’t work, branding is dead” moment.

Other marketing and communications specialists agree, though several questions raised by the decision deserve consideration. The answers reflect how Oregon, and perhaps other big universities, may rethink how best to develop a national brand in higher education.

Was the Contract Outsized?

Much of the murmuring surrounding the dissolution of Oregon’s contract with 160over90, a Philadelphia-based company, concerns the dollar figures involved. The $3.4 million the university had agreed to pay 160over90 over three years was part of a larger branding effort projected to cost $20 million and seeded by a $5-million gift. Michael H. Schill, the university’s new president, said that the contract would end after two and a half years, and that the rest of the money proposed for branding efforts would not be raised.

Ending the contract coincides with an effort mandated by Mr. Schill to streamline university operations and reduce administrative expenses. The university incurred about $40,000 in penalties for ending the contract, but will save as much as $500,000.

The amount proposed for branding at Oregon has captured people’s attention because “no question, it’s a lot of money,” says Teresa Flannery, vice president for communications at American University and former assistant vice president for marketing and communications at the University of Maryland. But the million dollars or so that Oregon paid 160over90 for each year of the contract is less than half of 1 percent of Oregon’s annual operating budget of about $950 million, she notes.

Compared to what other large universities spend with outside marketing and branding agencies, the Oregon contract is large, “but it’s not exceptionally large,” says Robert Moore, president of Lipman Hearne, a marketing and communications company that works with colleges. Doing market research and producing branding materials can be a costly enterprise, he adds. A splashy promotional video produced by 160over90 for the university could have cost hundreds of thousands of dollars to produce, Mr. Moore estimates.

Is Branding Over at Oregon?

Part of the narrative surrounding Oregon’s ending its $20-million branding project is that Mr. Schill plans to use any savings to hire more faculty members and build university research. It’s a notion that dovetails with the belief that Oregon is concerned about the possibility of losing its membership in the prestigious Association of American Universities due to its relatively modest research output.

The narrative also plays to naysayers, including many faculty members, who question the value of spending millions on branding.

Is Oregon abandoning branding efforts entirely? “That couldn’t be further from the truth,” says Kyle Henley, vice president for university communications at Oregon. The university already enjoys a national profile for athletics. Yet efforts to refine its brand are important, Mr. Henley says, to “raise the profile of our excellent academic programs, and the areas of research at which we excel.”

Mr. Henley, who was hired in August, says that Oregon had a “wonderful relationship” with 160over90 and that the agency equipped the university with a new brand identity, market research, and many useful tactics and strategies to reach its audiences. “We’re not walking away from that,” he says.

Representatives of 160over90, which has worked with the University of California at Los Angeles and Duke University, did not respond to requests for comment.

It’s important to spend money on the faculty and research, says Jason Simon, a vice president at SimpsonScarborough, a marketing and branding firm that works with colleges. But he adds that marketing and branding “have become such an important driver now for helping institutions achieve some of the goals that they aspire to” — including hiring more high-quality faculty members and raising more money for research. Not effectively funding university marketing and branding would be “really nearsighted,” says Mr. Simon, a former executive director of marketing communications at the University of California.

Ms. Flannery, of American University, says that the decision about the 160over90 contract at Oregon doesn’t seem to be about whether to do marketing and branding, it’s about what marketing and branding to do, and how. The university gets only about 6 percent of its annual operating budget from the state. If the university is to improve its financial picture, the money will probably have to come from increased enrollment and private giving, “the kind of activities that require people to be motivated and engaged,” she says. “I think they’re right to be focused on the what and the how.”

Who’s Doing Branding at Oregon Now?

The news about the 160over90 contract was accompanied by an announcement that the university would consolidate and centralize much of its marketing and communications operations to improve their efficiency and reduce administrative costs.

The university employs about 150 people with the word “communications” in their titles, in various offices spread across the campus, according to Mr. Henley. That sort of diffused marketing staff is typical of large institutions, but thanks to a series of leadership shake-ups at Oregon in recent years, “we might have become more siloed than some other schools,” he says.

Some large institutions have found success in centralizing many of their marketing and branding operations, notably Arizona State University. But there are challenges to consolidating the communications work done by many far-flung, niche offices. “Putting out a newsletter or organizing alumni gatherings for the department of civil engineering — there’s no way you can centralize that,” says Mr. Moore, of Lipman Hearne.

The work itself is not going away, branding experts agree. There is more and more demand for university communications, and Ms. Flannery says “everyone will be watching” how Oregon reorganizes its internal operations.

But Oregon will eventually hire outside consultants again, according to Mr. Henley. While the forthcoming reorganization is designed to maximize the use of in-house resources and keep costs down, “there are a lot of reasons you use outside folks,” he says, provided the project is strategically important.

As Mr. Faust sees it, Oregon’s decision is emblematic of a new era for marketing in higher education. Most college leaders have embraced the notion that marketing and branding are important in the heated competition for students, funds, and reputation. But when it comes to doing it in-house versus hiring an agency, and how much to spend, “I think a lot of schools are figuring out what’s the right mix, what’s the right amount in total,” he says. “And I think there’s going to be lots and lots of trial and error in the decade to come.”

Lee Gardner writes about the management of colleges and universities, higher-education marketing, and assorted other topics. Follow him on Twitter @_lee_g, or email him at lee.gardner@chronicle.com.