The mathematics of AI: Gemini pushing ed institutes’ digital marketing cost?

The rise of AI-powered tools like Google’s Gemini has redefined the way students search for educational institutions, offering curated conversational responses instead of the traditional link-heavy search results. This shift has dramatically increased the competition for online visibility, forcing educational marketers to invest more heavily in digital strategies.

The cost of getting noticed online has surged for educational institutions, with Google’s cost per lead (CPL) increasing by 30%-100% in recent years. Naturally, overall digital marketing costs have risen in sync, forcing institutions to reassess their strategies to maintain visibility and audience engagement.

According to Salil Jayakar, Deputy Director – Marketing and Communications, S.P. Jain Institute of Management and Research (SPJIMR), there has been nearly a 50% increase in CPL which has made customer acquisition significantly more expensive. Jayakar has also said they are also noticing a 30% drop in search volumes because of increased competition for websites to appear on the first two pages of search results. As a result, fewer people are clicking on organic (non-paid) links, with click-through rates (CTR) dropping by 15-20%. SP Jain is not an isolated case; institutions across categories are being pushed to spend more on their digital marketing efforts.

“While we’ve seen a rise in traffic thanks to Gemini’s precise, context-driven results that enhance engagement, the competition for top ad placements has intensified, leading to a 15-20% increase in cost per lead (CPL)," said Vineeta Sharma, Director of Marketing at Manipal Academy of Higher Education.

Why is education amongst those hit hardest by rising digital costs?

Educational institutions are particularly impacted due to their heavy reliance on digital marketing to attract prospective students. The increasing competition among institutions to capture the attention of a limited pool of potential enrollees has intensified the demand for prominent online visibility.

This heightened competition drives up advertising costs, making it more challenging for educational institutions to maintain effective digital marketing strategies within their budgets. Breaking it down further Jayakar said, “Gemini prioritises user-focused content and highly relevant keywords, as a result, paid ads are often pushed behind Gemini’s results, losing visibility. This unpredictability has intensified the competition for user attention. Overall, marketing efforts have increased to deliver the same outcomes as previous years.”

Simply put, appearing on the first page of Google search results is no longer sufficient—institutions now need to optimize for AI-driven summaries, focusing on structured data, comprehensive content, and user experience. However, while education institutions see AI overviews as an obstacle, Amit Verma, Founder and CEO of DigitUp views it as an opportunity. He emphasizes the importance of intent in leveraging Google's AI Overview. “The shift with AI Overview lies in its algorithm, which is now AI-driven and designed to understand user intent. When the intent is clear, you may see AI-generated overviews; otherwise, sponsored content might still appear. AI Overview doesn’t inherently reduce visibility—it’s uniform in its approach. The idea that it diminishes visibility is a misconception,” he explained.

Verma advises brands to focus on strategic branding and audience understanding instead of overspending on marketing. “The number of people searching for courses and related information has increased, and with a growing user base, there shouldn’t be a proportional rise in CPL if strategies are optimized,” he adds.

Opportunities

According to Burzeen Bhathena, Director of Marketing at SVKM’s Narsee Monjee Institute of Management Studies (NMIMS), there has been no significant impact on the website traffic because of Gemini. He has witnessed a marginal increase in CPL for their significant campaigns in 2023.

He explained why they are not deterred by AI overview, “One key reason for the increasing traffic is the limited amount of information that AI overview can display. A potential candidate, before applying, is keen to understand multiple facets of the program, including - the curriculum, the structure, facilities (laboratories, library, canteen, hostel, etc.) and the faculty members. It is impossible to cram all this information in an AI overview, whereas the website will provide all the information in a single view.”

Thus, as a counter-effort to stay visible, Institutions have also increased their advertising budget. Bhathena said that investment in online advertising has witnessed a 20 to 30% increase yearly. He adds, “This can be attributed to a drop in the conversions from non-paid mediums. To counter the drop, we have no choice but to focus on the paid media and thus push our budgets higher. The good part is that the increase in spending has also led to increased brand interest and favourability.”

Sharma further sheds light on why digital campaigns have seen an increase in cost for an industry that targets a specific audience. “Digital campaigns have become around 20-40% more expensive for targeted keywords and targeted markets as it is the same market for all the universities who have diverse student bases like us. International digital marketing has also become twice as expensive as the same audience is targeted by all the universities inviting international admissions.”

The way ahead

Institutions are thus diversifying their marketing efforts across platforms to achieve maximum output. While some shift their focus to multimedia content, others polish their SEO content to gain organic traffic. Institutions have also reported that outreach initiatives achieve maximum results albeit being a little time taking.

Shradha Agarwal, Founder and CEO of Grapes Worldwide, highlighted how AI tools are transforming content creation and advertising. “Gemini excels at customizing and tailoring creative content for specific cohorts, making it highly effective for reaching prospective students or consumers. It allows brands to connect with their audience more efficiently,” she explains.

Agarwal also noted that Gemini supports paid media campaigns by offering tailored alternatives that enhance advertising outcomes. “I use AI tools extensively to customize content based on placements and audience cohorts for my education sector clients. This approach not only boosts engagement but also significantly improves conversion rates,” she adds.

Bhathena shared his best strategies to navigate challenges presented by Google AI overview, “We decided to ensure that even straightforward admissions open announcements would be made through interactive videos across all social media channels. The other strategic decision was to make our existing students our brand ambassadors and have them showcase their ‘Life at NMIMS’, ‘How they managed to crack the numerous NMIMS exams’, and ‘Campus showcase’. The students, who are always highly savvy about social media trends, were more than glad to create videos to catch the wave (the latest trend).” He further adds that they have designed and implemented a process of continuous website improvement initiatives while ensuring that the content is updated regularly and follows the E-E-A-T-S norms laid down by Google.

Jaykar echoes similar thoughts about diversifying across mediums and concludes, “Our marketing efforts are being diversified across platforms to balance budget constraints with impactful results. This approach allows us to connect and engage more effectively with prospective students while maximising every branding and lead generation opportunity.”