Darrin C. Duber-Smith
Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, Inc., and senior lecturer at the Metropolitan State University of Denver’s College of Business. He has almost 30 years of specialized expertise in the marketing and management profession including extensive experience in working with natural, organic, and green/sustainable products and services. He was a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market/industry model and was leader of the first U.S. industry task force that helped frame the Natural Products Association’s definition of natural (c. 2005). He has published over 80 articles in trade publications and has presented at over 50 executive-level events during the past 15 years. A frequent media contributor and recipient of The Wall Street Journal’s In-Education Distinguished Professor Award in 2009 and WSJ’s Top 125 Professors Award in 2014, Mr. Duber-Smith is author of Cengage Learning’s “KnowNow! Marketing” blog at http://community.cengage.com/GECResource2/info/b/marketing/. He can be reached at DuberSmith@GreenMarketing.net or email@example.com.
First, it was supposed to be killed by television. Then, it was supposed to be killed by satellites. And finally, traditional AM/FM radio was supposed to meet it's imminent demise as yet another high-profile victim of the Internet, as live streaming, iTunes, and podcasts were supposed to crush the old format. So how's all that creative destruction working out?
Despite reports to the contrary, radio remains alive and reasonably well as a viable marketing medium with marketers spending $17.6 billion in 2015. Compare this with $66.7 billion spent on TV, and it is clear that the latter format has, as predicted, certainly garnered it's share of the ad spending pie at the expense of radio, but when you consider that marketers spent $11.3 billion on Internet display ads and only $34 million on podcasts, it appears that the demise of traditional radio has been greatly exaggerated. Indeed radio channels are not disappearing but (along with their ad dollars) are migrating online instead, and most listeners really don't much care how the service is delivered (features) as long as they get their, music, talk and sports (benefits). The Internet is obviously a more versatile delivery system than is the broadcast spectrum, but to the consumer, audio is basically just sounds, much like video is essentially just sounds and moving pictures. There is no question that the eyeballs and ears needed to make this all work have been migrating online for years, but content providers and marketers are still having lots of trouble figuring out how to make this migration more advertising-friendly.
This brings us to podcasting, which for it's part, remains a small-time endeavor despite being around for about a decade. Although 17% of Americans report that they listen to at least one podcast per month (doubled from 2009), there aren't any truly dominant content providers and so the market is highly fragmented, making the medium less than attractive to advertisers. Indeed, marketers report that they will increase podcast spending by only 2% in 2016. Will this change soon? To the consumer, audio is audio. For the advertiser, it's the quantity and quality of the listener that matters. A podcast is really just a recorded audio session, and in this way is no different than much of what we hear on traditional radio. So in this light, shouldn't more radio stations be doing more podcasting? Aren't these stations already content producers? They do have a ready-made communications channel and a listener base relative to existing podcasts, and many stations are part of nationwide networks. Besides, what's to stop TV producers (a medium that also has an audio component) from getting into the act? It looks like there is a great opportunity here for smart TV and radio marketers to figure out a way to generate revenue from this new consumer trend. The public will be listening in.
From a hopeful start to a rather dismal finale, holiday retail sales this year failed to impress the industry despite widespread optimism that this year would better than the last. And now most large chains are rethinking their approaches to growth. With announcements from Wal-Mart, Sports Authority, Kohl's, Macy's, Sears and others that they will be closing under-performing locations, it looks like a much-needed industry contraction is in motion.
The brutal reality is that declining shopper traffic, caused in large part by the continued massive migration of sales to online channels (but also by the fact that there are probably too many stores chasing too few consumers), is a trend that is likely to continue unabated for quite some time. Some retailers, like Kohl's, plan to close larger stores while opening smaller format stores with a more limited product mix as well as a much smaller physical footprint. Others are reducing locations altogether. The fast pace of digital sales, which for Kohl's jumped an unexpected 30% last quarter, has also encouraged these marketers to consider increasing investment in e-commerce, although high-end retailer Nordstrom said it would scale back spending due to a high costs and a huge corresponding drop in profits. But rest assured that when things get better for the shareholders at Nordie's, the level of online investment will almost surely increase again. The destructive power of e-commerce should not be ignored.
Overall, it is clear that some retailers are in serious trouble. Years of brick-and-mortar expansion has resulted in legions of undifferentiated retailers offering largely undifferentiated products, while far too much of the growing online business has been left to online "pure" players like Amazon. But now that Amazon has announced that it will open several hundred brick-and-mortar stores, it appears that the retail landscape just keeps getting stranger and stranger. But as Yoda would say, "Buy American consumers must" and with an ever-expanding population and consumer spending comprising two-thirds of GDP, there is ample opportunity for marketers who manage to get the multi-channel formula right. There will be plenty of winners, but there will also be plenty of losers. In this new environment that has followed decades of unfettered expansion, most retailers will probably be pressured to contract in terms of both number of stores as well as square footage over the next several years. These same retailers will, at the same time, need to invest considerable sums toward shoring up their online platforms, Nordstrom's temporary profit problems notwithstanding. It should also be expected that more branded product manufacturers will try to bypass intermediaries like wholesalers and retailers and endeavor to offer their products direct-to-consumer at considerably cheaper price points. Channel power shifting away from retailers and towards manufacturers would be a major development indeed. Could this happen? Ultimately consumers just want their goods and services and most don't much care where they come from, so perhaps major retailers should be thinking a bit more about what value they truly offer to a consumer who can just as easily buy direct from a brand's website. Stay tuned for more creative destruction.
Dish Network's Sling TV streaming service, launched about a year ago, now boasts over 600,000 customers according to the company, shedding some light on how much success traditional service providers are having in attracting what have been termed "cord-cutters". These are the people who have opted to no longer pay the $80 or so monthly fees for traditional cable/satellite access, and it looks like the $20 per month, slimmed down channel offering (which includes ESPN among other popular channels) is gaining some traction. It also looks like scaled-down, less expensive bundles might be the future of television.
Despite the hype surrounding the Internet and its capacity for creative destruction, TV isn't going anywhere. In fact, young people love video entertainment more than any other generation. It's just that the traditional TV packages have become prohibitively expensive for far too many people, and many of us do not appreciate being forced to purchase dozens of channels that we will never watch. Soon every content provider will be involved in video streaming of some sort, and it isn't tough to predict that soon we will all be watching the same content on multiple screens and through multiple formats albeit with many, many more options. Some of the more ridiculous channels will probably perish in the process and this development will be met with much rejoicing, but the ones that offer content that consumers desire will likely survive and thrive. Thus far, the migration of content from broadcast/cable/satellite delivery systems has been rather slow when one considers how fast the Internet tends to alter things, but it looks like the industry is in the midst of a revolution of sorts. Generally speaking, consumer needs drive innovation, and it is clear that the Internet is the future of video. It's simply the most efficient way for advertisers to reach the people they want to reach. And content providers are now stepping up efforts to get this early market share as TV becomes a multi-device proposition. Look for even more bundle options emerging in the very near future.
What does a brand name really mean to marketers? Plenty. The brand name is not only the first thing that consumers learn about the product, it is also often the first line of defense against competitors. As such, marketers rightly view the brand name (in addition to other elements like the logo, font, colors, and slogans) as intellectual property that must be protected. Enter two unlikely characters--food guru Wolfgang Puck and Kimbal Musk, brother of Millennial cult figure and electric car/not-so-electric rocket marketer, Elon Musk--two entrepreneurs who are battling over a name.
Here are the facts. Kimbal Musk opened an eatery called The Kitchen on Boulder's Pearl Street Mall about 12 years ago and has since added several locations to his portfolio. Mr. Musk met Wolfgang Puck, whom he considered a role model, three years ago in California, at which time Kimbal shared his "farm-to-table" philosophy with the famous chef in the context of talking about his successful restaurant concept. Last summer, Mr. Musk became aware that Mr. Puck had opened a restaurant in Michigan called "The Kitchen By Wolfgang Puck". Ouch. Not only is Mr. Musk feeling like he has been ripped of, which he undoubtedly has, but this move by Mr. Puck is apparently the first of many locations to be opened in the near future. What's the problem?
If consumers are likely to be confused about which brand is which (and they likely are), then this is precisely when regulators and the courts should get involved. Mr. Musk, for his part, has tried to discuss his concerns with both Wolfgang and his minions, but has made no progress. It looks like Mr. Puck is content to let the lawyers hash it out. What is the most likely scenario? If Mr. Musk was just a regular Joe, there probably wouldn't be much he could do about this. He wouldn't have adequate resources to fight the battle with the gargantuan Mr. Puck in the first place, and Mr. Puck could use his power to tie the issue up in the courts for many years while growing his "Kitchen by Wolfgang Puck" concept all the while. Puck might be an ethically challenged businessman (and it appears that he is just that), but the legality of who can use the name as well as whether or not such a name can be trademarked in the first place must be decided by the judiciary. And it just so happens that Mr. Musk has a very wealthy brother and a very famous last name, and could give Wolfy a run for his money. Maybe these two progressive businessmen can settle over some Kale and fresh-pressed, certified-organic litchi fruit cider. Or perhaps Mr. Musk can be given a piece of the action, or maybe a strategic alliance might satisfy both parties, or even a joint venture could be in order. Or perhaps, the judge should simply tell Mr. Puck to cease and desist, since Mr. Musk had been using the name for quite some time and the two concepts are virtually identical. One thing is for certain, this one will be very interesting to follow.
I don't think too many people saw this one coming, but the movie Deadpool has thoroughly dominated the box office in it's first two weeks. The movie was made for only $58 million but grossed an unbelievable $152 million over a four-day President's Weekend debut. Partly due to an utter lack of competition, it remains at #1 with a cumulative total of $235.4 million thus far. It's no Star Wars, but Deadpool might become the highest-grossing R-rated movie in cinematic history. Can this phenomenon be explained?
Perhaps. To start with, it seems like marketers spent a lot of money on TV advertising, a marketing campaign that featured the costumed star of the movie giving some highly questionable advice for Valentine's Day, among other very funny vignettes. In addition, the creative execution of the ads has been very well-received by a viewing public that has grown accustomed to seeing somewhat nondescript, unremarkable movie trailers. The strategy was fresh and delightfully inappropriate. It stood out. Another reason for the film's popularity involves the relatively small number of successful films we've had over the past few years and the pent up demand that movie afficionados now have for higher quality films. Plus, it seems that America has a huge appetite for comic book characters, and that Marvel has a seemingly never-ending stable of obscure heroes and anti-heroes from which to draw. But do all of these factors together explain this unlikely success story?
I think not. Clearly, there is also something in the zeitgeist at play here. Perhaps it's the raunchy, South Park/Family Guy-style humor that has become so ubiquitous. Indeed American society has come a long way from Superman's "Truth, Justice and the American Way" mantra. And if most of the more successful comedies are any indication, cynicism and sarcasm now rule the day. Remember at the end of that day, movie-makers must give consumers what they want; and if what they want happens to feature a foul-mouthed teddy bear, or mercenary anti-hero, or something equally edgy then so be it. Movies tend to reflect the times, and that's the reason that so many movies seem so "dated" 20 or 30 years after introduction. Others have more staying power. And Deadpool, for it's part, will certainly become a tentpole franchise product replete with several sequels and possibly an R-rated video game or two. Who knows what else marketers might come up with, and maybe R-rated superhero movies will become the next movie fad. But I wouldn't expect to see very many licensed Deadpool toys or TV movies intended for kids. I haven't seen the movie yet, but if the trailers are any indication, Deadpool isn't a product for the young and impressionable.
Sometimes a celebrity need only utter a few words, and he or she can move an entire market. We all know about the power of celebrity endorsers, but what happens when a famous person makes a casual mention of a brand as Peyton Manning did during this past Super Bowl. Experts valued his famous mentions at almost $14 million, mostly a function of the size of the audience, and although he didn't get paid for the brand integration, Mr. Manning does own a Budweiser distributorship or two in Louisiana. And now Beyonce is getting into the act.
But we aren't talking about her controversial Super Bowl act, but rather the reason she did the Super Bowl gig in the first place. These folks do it for the publicity and get paid nothing for their performances, so it was no surprise when she released the song "Formation" to coincide with the event. In that song she makes mention of taking a man to Red Lobster after sexual relations, and so far sales for the chain have surged 33%. Wow. Both brands are obviously thrilled at these "organic" brand mentions, but it does beg the larger question as to the authenticity of behaviors and attitudes held by famous people that many in our culture revere so much. Another question is whether or not authenticity is truly an important variable for consumers, despite the fact that so many consumers (especially Millennials) say it's hugely important. Does it really matter that Peyton is a Budweiser owner when he "casually" mentions the brand? Should he have to disclose his relationship as is the rule in endorsement advertising? Could Beyonce soon be a part-owner of one or more Red Lobsters? What is to stop organizations and celebrities from entering into more casual, informal relationships unbeknownst to consumers?
The issue of what actually constitutes advertising and what is simply free publicity is becoming too loud to ignore. Product placements are everywhere, ads have crept into news stories in the form of "native advertising", and celebrity endorsements are becoming increasingly complex. But the law states that endorsers must disclose their relationships. Beyonce likely did not intend to juice Red Lobster sales, but we don't really know for sure. Manning's mention was not the first time he had done so, and he is financially invested in the the company, so his intentions are certainly in question. As for a future with increased celebrity/brand integration, the issue of what constitutes an advertisement versus what is simply an exercise in the First Amendment is becoming ever more important.
One of the ways a marketer can differentiate a product is through branding, and one of the most important components of a brand is the brand name itself. So when marketers come up with something special, it is always best to try to register it as a trademark so that other marketers can't use it for themselves. Coca Cola thought it had one such name when it attempted to register the common English word "zero" for it's Coke Zero product, which has primarily targeted men and might ultimately be the last hope for growth in the diet category.
Diet sodas, as a category, have been tanking for more than a decade, in part due to the public perception of the sweetener aspartame. This perception has led some product developers to replace the ingredient, but now it appears that the word "diet" might now have negative connotations with consumers. And while Diet Coke revenue decreased by 6% last year, revenue for Coke Zero increased by the same amount. One can see why Coke would want to protect this brand. But attempts to do so have been unsuccessful thus far, however, as authorities in both Canada and the U.K. have blocked Coke's attempts to get rights to use the word exclusively after successful arguments made by Pepsi. It seems obvious that since they were the first to use the word, and it should be theirs to trademark, but trademark law is very complex. Dr. Pepper now has a "zero" named product, and U.S. authorities will finally rule after 13 years. A judgment in favor of Coke would allow marketers to more easily sue imitators and would likely deter such imitation in the first place, at least among companies in the world's more law-abiding nations.
This is a very big deal since the diet, category is tanking across the board. This trend is especially ironic in a world that continues to get fatter, but there are plenty of substitutes for sugary sodas in the industry, and consumers continue to migrate toward teas, waters, and energy drinks among many others. Coke Zero is showing growth, and the company has done everything in it's power to protect it's brand. Officials must believe the word "zero" to be too generic for trademarking (like the word "diet"). It's hard to imagine anything other issue gumming up the works. And intellectual property associated with the brand such as logos, slogans and names not only serve to differentiate a product, but also can ultimately be worth billions of dollars. For Coke, this upcoming ruling will be huge.
By now, most everyone knows that Chipotle has been losing a lot of customers in the aftermath of it's widely-publicized food contamination issues, at least for now. That's not surprising, and it remains to be seen how many of these customers will come back, but even if many of them do return, legal problems are likely to keep the company in the news for many years to come. And not in a good way. The brand might yet recover, and much of that might depend on what marketers do or fail to do over the next couple of years. What is surprising, however, is that most of Chipotle's customers did not opt for Taco Bell, Qdoba, and other fast-Mexican brands, but rather switched to McDonald's, Panera, Domino's, and others in greater numbers.
Cute dog, eh? Just making sure you are still paying attention. Of course, the company's market share evaporated the most in areas like Portland and Seattle where most of the outbreaks occurred. The decline was less severe the further the geographic area was away from the outbreak areas. Sales declined 43% in Portland and 34% in Seattle, but dropped only 16% in Miami and 19% in Dallas. About 30% of the Chipotle defectors in a recent ITG study opted for more upscale options outside the fast food category or decided to eat at home, but the remainder of the bunch scattered to the four winds with McDonald's being the biggest winner. And that's good news for McDonald's, which has struggled over the past few years, and has also recently found tremendous success with it's all-day breakfast concept. Kudos for Mickey D's. But it's hard to find any good news in this whole publicity nightmare for Chipotle, and Qdoba seemed to have missed out on a major opportunity to steal more customers than they did, as a major marketing campaign was noticeable absent. It's hard to imagine why this obvious competitor failed to exploit this opportunity. But Chipotle does have a loyal following, and Americans tend to have short memories. The product is good. The prices are reasonable. The stores are everywhere. And a clever and humility-filled multi-million dollar marketing campaign could do much toward a recovery for this progressive burrito brand.
After years of being relegated to rear of the fast food wars, the hot dog seems to be making a comeback. Once much more common, chains such as DQ, Weinerschnitzel and Pup N' Taco have become much less ubiquitous these days as concerns about what is actually in hot dogs in addition to changing consumer tastes and the availability of more choices have all combined to drive many consumers away from the American past time and towards higher end fast food brands such as Chipotle, Smashburger and so many others. But is this about to change?
For it's part, Sonic has been doing quite a bit of national advertising over the past decade, and lately the chain (largely known for burgers) has been featuring hot dogs in it's TV ads. And that's a lucky thing since a much larger competitor, Burger King, recently announced that it will begin offering hot dogs at all 7,100 locations. Since McDonald's (after introducing the all-day breakfast menu) and Wendy's (after introducing the 4 for $4 promotion) have been faring much better of late, marketers at Burger King feel like they have to do something to juice sales, and entering the hot dog market apparently presents the most lucrative market opportunity at the present time. Plus, since the company's burgers are flame-broiled, throwing a few hot dogs on the grill makes a lot of sense. But are consumers actually consuming more hot dogs these days? Or will this move simply add another player into an already cluttered marketplace? Although a 2013 Bloomberg.com reports that the industry is shrinking by a few percentage points each year, a visit to the more upbeat hotdog.org tells us that the product is consumed in 95% of American households and that the average American eats as much as 70 dogs per year. That estimate seems a bit high especially coming from a biased not-for-profit association, but the fact of the matter is that Burger King believes the slowing market is large enough for more industry participants; and Burger King, Sonic, and others could help drive a new hot dog renaissance by simply making the product more available. Or, consumers might shun the whole idea despite the investment of millions in marketing. This will be fun to watch.
Digital or traditional? How do you prefer your advertising? Most ad experts would agree that this isn't really an "either/or" proposition, and smart marketers must endeavor to effectively integrate brand messaging across multiple mediums. A more contemporary approach would almost certainly include the Internet, but also more traditional mediums such as advertising, sales promotion, PR, direct marketing, personal selling, and perhaps even a sports/entertainment sponsorship or two. And as far as the Super Bowl is concerned, pairing the coveted TV ad with a robust digital strategy is the best way to get the most return on investment from the marketing program.
Many marketers call this multi-pronged approach "Integrated Marketing Communications". In the case of the Super Bowl, the $5 million ad "acts as a rock in the pond to stimulate these other activities, if done well", according to one expert. And this isn't just true for the Big Game, but also rings true for most types of brands in any marketing situation. Relying solely on social media, for example, might be an inexpensive way to approach marketing strategy, but has very obvious limitations. And relying on traditional ads, such as those found in broadcast and print media, is an equally myopic approach that ignores the migration of so many eyeballs to online formats. The best approach it would seem involves using one platform as an anchor and then using other mediums to support that platform. Of course the right combination depends on so many factors, but smart marketers know that finding an effective formula is what they must do to rise above the marketing clutter and meet marketing objectives.
Born in 2003 and after years of disappointing performance, the Toyota Scion will no longer be available starting in 2017. Well, that's not exactly true. Actually it's not the car that's being dumped, but in fact the brand, as Toyota plans on adding the flagging products to its more generic-sounding "Toyota" lineup. Why is this interesting?
Ditching the brand rather than the product itself is really an admission by marketers that the positioning strategy has not worked. The product was developed to attract young, Gen X buyers and was known for funky designs and experimental marketing tactics, although it was never wildly successful. Fast forward 13 years and we find that the brand, like so many other these days, has failed to gain traction with the Millennial generation, the youngest of whom are becoming young adults and the oldest of whom are moving into middle age. What was good for the previous generation is not always good for the next, and what is truly fascinating about this case is that, at first, the problem was that Millennials were delaying car purchases, but when they finally did start to buy, they preferred brands used by their parents. All of this suggests that there may be opportunities for older brands to connect with younger consumers via their parents. Perhaps we will see more of this approach in the near future.
Denver's "Orange Rush Defense" was Superman's Kryptonite last night, with a large helping of the rare mineral delivered by MVP Von Miller, but more importantly for marketers, a close game ensured that most viewers remained engaged and active during the entirety of the contest. The cost for a 30-second ad spot reached $5 million this year, and don't even ask what corporate sponsorships went for. I haven't a clue. Ticket prices reached record highs as well, way up from last year in both primary and secondary markets. Graphs that attempt to visually represent this meteoric growth resemble very steep staircases that get higher and higher each year. So companies are lining up to spend money to be associated with this event, but what about the average viewer?
Total spending is expected to top $15.5 billion as the average viewer spends $82.19 on food, decor, apparel and other consumables. That's quite an economic event! And visitors to Santa Clara were expected to spend around $220 million this year, up from $205 million last year. Betters were expected to wager over $4 billion and almost 97% of those bets classified as illegal. Shocking! Even the black market gets it's share, and with well over 100 million viewers and growing, this thing just keeps getting bigger.
Overall, the ads this year were pretty tame, without last year's edgy advocacy and cause-related themes that many deemed were inappropriate for viewers trying to have a good time. Some were funny, and as usual, Dorito's was ranked near the top. Many more were unmemorable, and only one was completely ridiculous (the highly regrettable "puppy/monkey/baby" Mountain Dew energy drink commercial). At $5 million for only 30 seconds, it would seem that some marketers would try a little harder to rise above the Super Bowl ad clutter, and it seems that most of the good ads, were previously previewed online in the days before Big Game, thus spoiling the surprise for many viewers. And it also seems to me that this phenomenon of Super Bowl ads becoming less remarkable has been progressing a little bit every year. Although an improvement over the sanctimonious, preachy vibe from last year, this year's effort's only truly remarkable feature was the price. Are Super Bowl ads, like Black Friday sales, losing their luster? Not from an advertising perspective they aren't as the huge reach is impossible to ignore, but these ads may be losing their anticipatory appeal which will certainly affect how many people bother to view these things online. The oft-quoted "I mainly watch for the ads" might soon become a thing of the past, but this is not likely to affect pricing since this is driven by the size of the audience rather than attitudes of viewers. Yet, if the buzz does begin to wane, marketers might have to lower their online expectations a bit in the coming years as the "coolness" factor fades. Let's see what happens next year.
Satisfied with the success of it's first physical bookstore in Seattle, Amazon.com has plans to open as many as 400 locations across the U.S.. This is a pretty big deal, especially for competitors who have struggled to be price competitive with Amazon. But why would a company that gets much of its competitive advantage from not being saddled with high costs associated with brick-and-mortar stores want to have a physical presence in the first place?
Although sales of many categories of goods and services continue to migrate online, it is clear that physical stores will always have their place. And Amazon has such a robust online platform and fantastic logistics system that integrating a physical retail component will probably be fairly easy, especially since the company has run a successful test in it's hometown. Purchasing a product through Amazon in the store or online (or even online while standing in the store) would likely be a seamless experience for the average consumer. And the company's brand equity, combined with the media buzz such an interesting strategic move would generate, should bring a lot of people in the doors, at least initially. Pricing pressures from this move will almost surely strain Barnes & Noble further, and Amazon could easily expand the model beyond books into other categories of goods, as it did very successfully online over the past few decades, which would threaten most other retailers as well.
The answer to this threat is for major retailers to invest more heavily in further integrating the in-store and online experience. Perhaps some major players could band together and form an online co-op of sorts (in the vein of deep-pocketed Hulu.com) so that more economies of scale and scope can be reached and consumer prices can be lowered. Smaller chains must rely on "differentiation", a strategic alternative to price competition, and must adroitly exploit advantages based on features and benefits or brand attributes. One thing is for sure, this move has been in the works for years, so it should not be much of a surprise to established retailers.
Over the past several years, for-profit colleges have been under quite a bit of intense federal scrutiny. Some companies, such as Corinthian, have had to close their doors, while others remain on what could be described as a form of academic probation. DeVry University is the latest organization to be sued for misleading students about job prospects and potential earnings, and it looks like the Federal Trade Commission is not likely to back down.
The FTC is charged by Congress with the protection of consumers against false and misleading advertising, and the agency is managed by the executive branch, in this case the Obama Administration. And while Mr. Obama, himself a former adjunct professor, is a huge fan of higher education, he is not a huge fan of the for-profit business model of higher education. Claims that 90% of graduates find jobs in their field within six months after graduation and assertions that graduates make 15% higher than graduates than all other institutions are not only unbelievable, they are probably pure fiction. While marketers are allowed a bit of leeway in the form of "puffery", exaggeration which cannot be proved one way or the other (such as "World's Greatest Hamburger"), outright fabrications are frowned upon by the establishment. And with good reason.
Amid additional claims that for-profit colleges take advantage of student-loan dependent students as well as veterans on the G.I. Bill, it looks like this industry has some cleaning up to do. The University of Phoenix, the institution that probably best defines who the good guys are in the for-profit segment, might provide some "best practices" clues for other industry players. Until this housecleaning occurs, the regulatory scrutiny will continue.