Meet Michael Clifford. Clifford's important new book is "How To Run A College - By A Guy That Never Went To One!". He could relate to high school dropout, Ambassador College adman and "Chancellor" Herbert W. Armstrong.
MARTIN SMITH: Why did the university need to be reinvented? What's wrong with the way that universities were running up until the time that John Sperling came along with Phoenix?
MARK DeFUSCO: John saw the constraints of most- most college professors. You know, anybody who's got any new ideas in college are quickly beaten down. The academy hasn't had a real change in how it works for almost 500 years.
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ANNOUNCER: [Univ. of Phoenix television commercial] Which university revolutionized education in America?
MARTIN SMITH: The granddaddy, University of Phoenix, spent $130 million on ads in 2008.
ANNOUNCER: [Univ. of Phoenix television commercial] Which university has the largest business school in the country?
MARTIN SMITH: That's more than brands like Tide, Revlon and FedEx.
ANNOUNCER: [television commercial] Why wait any longer?
MARTIN SMITH: What they spend on sales and marketing can rival or exceed what they spend on teaching.
MARK DeFUSCO, Dir., University of Phoenix, 1994-'02: If you take a look at for-profit colleges, the analysts will tell you that anywhere between 20 and 25 percent of the total revenue of a company is in sales and marketing, about a quarter. In most cases, the faculty are in the 10 to 20 percent range.
MARTIN SMITH: [on camera] Should that make us uncomfortable?
MARK DeFUSCO: I don't know. Why would one be uncomfortable?
MARTIN SMITH: Well, you're spending more on getting me to come to the school than you are on the service you're providing once I'm there.
MARK DeFUSCO: I understand. Well-
MARTIN SMITH: Is that right?
MARK DeFUSCO: When I go and buy perfume for my mom, the chemicals in the bottle and the bottle itself amount to about $0.50. The advertising amounts to five or six bucks.
MARTIN SMITH: But you're not selling perfume.
MARK DeFUSCO: What makes education so special? For-profits have to get people's attention, and they do a very good job of getting people's attention.
