(Poets&Quants) — You may ask yourself, “What does a goat farmer from the Appalachians know about business school?” Well, you probably won’t ask yourself that. Yet.
You may ask yourself, “What does the highly regarded University of North Carolina’s Kenan-Flagler Business School know about what a goat farmer knows about business school?” Okay, almost for sure you won’t ask yourself that. But at Poets&Quants, we did. And as they say here on the Internet, you’ll never believe what we found.
It’s a bizarre tale of farm animals and new-school marketing gone bad—all assisted and legitimized by Google’s infamous algorithms.
Google “best online MBA” and the fourth hit down will bring you to a website showcasing a surprising ranking: BestCollegeReviews.org’s “Top 10 Online MBA Programs.” It leads, credibly enough, with Kenan-Flagler and Duke University’s Fuqua School of Business. But then, like weeds crowding out the flowers, up sprout fifth-rater schools Capella University, the University of Phoenix, and Walden University at spots 7, 9, and 10.
Continue to browse your “best online MBA” search results and up pop three similar websites in the first three pages. BestCollegeReviews and these others are part of a network of some 10 higher-education websites, many of them ranking business schools, all of them run by three men, one of whom does not exist.
One of the sites, SuperScholar.org, ranks “The Best Online MBA Programs of 2014,” putting Southern New Hampshire University School of Business at No. 1, the University of Massachusetts Isenberg School of Management at No. 2, and Kenan-Flagler, which began offering its online MBA@UNC in 2011, at No. 3. The rest of the list mixes reputable schools such as Indiana University’s Kelley School of Business at 17th with bottom-end institutions such as the Liberty University School of Business, offering a 36-hour online MBA, at 11th.
The rankings, of course, serve as little more than bait to lure unsuspecting Internet users into a lead generation scheme. In some cases, these websites don’t even bother to explain what metrics are used to create the school rankings. When there is some content on methodology, it is vague, so much so that it is impossible to determine why an online MBA program might find its way on the list.
In fact, in at least one case, how Duke managed to eke out a No. 2 ranking on BestCollegeReviews’ list even confounds Duke itself, because it does not even have an online MBA program. BestCollegeReviews says, “Duke offers a Master’s of Business program through their Fuqua Online program.” Over at Fuqua, spokesperson Elizabeth Hogan responds, “We do not have a Fuqua Online program. Fuqua does not have any online programs so it would be odd for us to be featured in such a ranking.”
While BestCollegeReviews’ ranking entry for the non-existent Fuqua program contains no links to other sites or pages, Kenan-Flagler’s No. 1 entry, like the entries for Walden and Capella, has a “more information” link that connects to a page dedicated to collecting, for the school, prospective students’ personal information—name, address, email address, phone number, age, education details including GPA, and years of work experience. Kenan-Flagler’s No. 3 ranking on SuperScholar also contains such a link. The UNC business school appears to be the only top business school that uses these sites to contact prospective students.
Peeling the murky B-school ranking onion
About those men: phone numbers, website postings, domain registries, and state documents confirm they run a network of higher education websites, many of them owned through the trio’s digital media company, SeaWaves Technology.
Let’s start with Ryan Caldwell. On his website, PopCrunch, he calls himself Ryan “Cowboy” Caldwell. According to his online postings, Caldwell owns SeaWaves, which operates a number of rankings websites, including SuperScholar. State of New Jersey records show that SeaWaves was registered there as a limited liability corporation in 2006. The business, currently still registered in New Jersey, expanded in 2011. State of Tennessee records show SeaWaves was registered as an LLC in Tennessee, in 2011, in Grundy County, former stomping grounds of one Davy Crockett.
Down at the bottom of Grundy County sits Tracy City, originally a coal town after the mineral was discovered when, according to the local chamber of commerce, “Ben Wooten’s sons were digging out a groundhog from beneath a stump.” According to Tennessee state records, SeaWaves’ Tennessee office is located in Tracy City at 475 10th Street, apartment “B,” which Google Street View reveals to be little more than a tin-roofed shack.
Let’s return, for just a moment, to New Jersey. Here, or at least in a state database, we find SeaWaves’ principals: Micah Sparacio and Joseph Prato. There’s no mention of Caldwell in any official documents connected to the company.
On one of SeaWaves’ websites, Prato is listed as a realtor at Sea Isle Realty Services on the Jersey Shore, 30 miles south of Atlantic City. An online obituary published this year after the death of Prato’s father reveals that Prato is Sparacio’s uncle.
Sparacio, with Prato, runs some 10 higher-education rankings websites, many of them containing business school-related content. Sparacio names himself as editor of a few sites, and farms out some of the editing to freelancers.
If you’re hoping for logic, consistency, or accuracy among the rankings on these sites, you’re in for a disappointment.
On SuperScholar, we find Walden at No. 8 in the “Top 25 Online MBA Programs,” miles ahead of Arizona State University’s respected Carey School of Business at No. 16, and Indiana University’s vaunted Kelley School of Business at No. 17. Unlike Walden, neither Arizona State nor Indiana enjoys a link soliciting personal information for the school to contact prospective students.
BestCollegeReviews has a section on methodology, saying “graduation rate and cost per credit account for 45% of the total rankings,” adding that instructor quality accounts for the next-largest measurement, and that the ranking is also based on percentages of full-time faculty, and instructors’ experience teaching online. The rankings are derived from public data, including information from the National Center for Education Statistics, the federal Education Department, the U.S. Bureau of Labor Statistics, and the U.S. Census Bureau, according to the site.
However, data purportedly used for the rankings, such as graduation rates for many online programs, and instructors’ online-teaching experience, isn’t available in public databases.
Although Prato and Sparacio’s TheBestColleges.org puts Capella at No. 6 and Walden at No. 11 in its “Top 12 Online MBA Programs,” the rest of the list is a conglomeration of mostly “never heard of it” schools such as Northcentral University at No. 2, Colorado Christian at No. 4, and Herzing University at No. 5. Temple University, where Sparacio studied philosophy and taught as a grad student, sits at No. 1.
On Sparacio’s blog, he is given to philosophizing. “You can’t skin a rabbit with a dull knife.” That insight might not be a life-changer, but at least it makes more sense than “Capella University has the seventh-best online MBA program in America.”
When Poets&Quants visited BestCollegeReviews’ “Top 10 Online MBA Programs” and sent in a request for information about first-ranked Kenan-Flagler, it took only five minutes for an emailed form letter to arrive from Susan Cates, executive director for the school’s online MBA program, MBA@UNC, and associate dean for Kenan-Flagler executive education. What followed were 14 more emails over six weeks from Kenan-Flagler, including five from admissions counselor Katherine “Katie” Heffelmire. “Did you receive the email I sent on 9/5?” Heffelmire inquires. “Sometimes it gets caught in the spam folder.”
The spam folder? I should hope not. After all, this is Kenan-Flagler, ranked among the top 20 American B-schools by Poets&Quants, Businessweek, and U.S. News & World Report, and 35th in the world by The Economist. But we better check that folder anyway. Let’s see, here’s a sure-fire stock tip, here’s a free gift, hmmm, something in Chinese, and, goodness, hey, here’s a nice message from Katie, wishing us well and wondering if we’re still interested in an online MBA at Kenan-Flagler, or if she should close our “account.”
How on earth did this important final missive end up in our spam folder? Not to worry, Katie, Poets&Quants will be in touch with Kenan-Flagler.
Right after we contact Sparacio. Unlike his online alter ego Ryan Caldwell, Sparacio is a living, breathing human. And a poet: “Fiery and feisty, a fighter, her mind moves like well-crafted hips . . . ”
Sparacio’s blog’s domain name is registered to his imaginary associate, Caldwell. It contains those poetic words and many more, along with Sparacio’s musings on a variety of topics, such as his embrace of the meat-focused “Paleo diet,” and general descriptions of his life. “I’ve been building a small farm for the last 2-3 years,” goes a 2012 post. “Right now I have two beef cows with another on the way. I also have four goats with approximately 6-9 babies on the way. And I have 4 chickens.”
In addition to his farming routine, Sparacio works as a trainer at Tenacity Adventure Fitness in Tracy City, which describes him online as “passionate about helping people reach their own personal fitness goals in a natural and healthy way.”
But as we’ve seen, there’s way more to this man’s life than wrangling goats, doing jumping jacks, and cooking Mexican beef casserole. In a blog post titled “My life for April 2012,” Sparacio writes that he’s training for a Tough Mudder obstacle-course race, “putting a pond in at bottom of property,” and “aiming to hit 300 leads this month and 900 by August.”
There it is: lead generation.
On BestCollegeReviews, Sparacio and Prato lay out, in a preemptive defense of their rankings, the revenue model for their lead gen business. “There is a lot of corruption in the world of online rankings and we want to be forthright about how our business model works. Best College Reviews has partnerships with over 400 colleges and universities and those schools pay us when a student requests information.
“However, these partnerships do not, and never have, influenced our rankings. We regularly get requests from schools to be added or moved up in our rankings and we always refuse.”
So, what is lead generation exactly?
Lead gen falls under the umbrella of content marketing, the new-school practice of seeding the internet with material that snags viewers’ attention and guides them to particular websites. With lead gen sites such as SuperScholar and BestCollegeReviews, every time a visitor links to a featured school’s dedicated page and provides contact information, that’s a “lead” the school pays for. In an announcement on the launch of TopCollegesOnline, SeaWaves describes the site as a service to prospective students and as a venue that will allow the company to “focus on lead generation opportunities in the profitable higher education industry.”
Kenan-Flagler, of course, resides on the hallowed ground of that industry, in an extremely competitive business environment. Its MBA@UNC program is only three years old, but it has become popular and is one of just three online MBA programs at a Top 20 U.S. school, besides Carnegie Mellon and Indiana. According to IRS filings, revenue from the school’s online education reached $2.85 million in 2012 from $920,000 in 2011, the year the program started. The number of online MBA@UNC students, now paying $97,000 each for the degree, has grown exponentially to 450, from the 19 who started in 2011, with students from 35 countries.
What’s a first class academic player doing on a site like this, with such for-profit scrappers? Phoenix, Capella, and Walden—the latter two making frequent appearances, with lead gen links, on Sparacio’s sites—were highlighted in a 2012 Senate Education Committee report profiling 30 for-profit education companies. The report notes that Capella, in 2009, spent nearly three times as much money on marketing than on student instruction, as did University of Phoenix owner Apollo Group. Walden spent 41% more on marketing than on instruction.
“For-profit colleges gather contact information of prospective students, or ‘leads,’ by paying third-party companies known as ‘lead generators’ that specialize in gathering and selling the information,” according to the report. “Among the 62 lead generators used by companies analyzed, the cost per lead ranged between $10 and $150. Lead generators advertise themselves … as a free, safe, and reliable way to get information about college.
“But lead generator sites generally direct students only to schools and programs that pay them. Lead-generation companies have a history of engaging in online marketing using aggressive and misleading methods. These marketing efforts continue to be a serious cause for concern.”
The National Association for College Admissions Counselors has issued a warning on lead gen. “Lead generation companies have capitalized on the interest in online education, offering a questionable ranking of the ‘top’ online schools or simply providing enrollment information about online colleges,” the association says. “A rankings methodology is the backbone of any rankings list. Don’t be fooled by vague descriptions of where the data comes from.”
Let’s do a little math to come up with a hypothetical lead gen income for Sparacio. Even if he’s making only $10 per lead and hits his 300-leads-per-month target, that’s $36,000 per year. If he ratchets up his game and hits his 900-lead mark, that’s $108,000 per year.
State of Tennessee Comptroller’s records show that Sparacio and his wife Stephanie, a licensed social worker, own their home, market appraised at $232,000, bought in 2011 for $27,000. The records show the couple also owns a nearby woodland of unspecified size appraised at $468,000, bought in 2012 for $270,000, and Sparacio owns through his company, Mountain Enterprises LLC, a two-acre plot with a 7,500-square-foot prefab building on it near Tracy City, appraised at $75,000, bought for that amount in 2013, plus a 1 1/2 acre lot close by appraised at $11,000, bought for $13,500 in 2013. How much Sparacio’s lead gen work contributed to his assets could not be determined.
A practice worth defending?
There’s what might be considered legit content marketing, and there’s deceptive content marketing. Kenan-Flagler, while actively engaged in the former, has no truck with the latter, says chief marketing officer Michael Schinelli. The school derives leads from advertising and online marketing, which prospective students may find and use to contact the school, but it doesn’t work with “cost-per-lead” services, Schinelli says. Kenan-Flagler has no paid advertising relationship with lead generation sites such as SuperScholar, Schinelli adds.
However, the MBA@UNC program is run by Kenan-Flagler’s executive education unit, which is a limited liability company, in conjunction with educational technology company 2U, which delivers and markets the program. Susan Cates, associate dean of executive education for Kenan-Flagler, whose name was on the first email Poets&Quants received after requesting information on the school via BestCollegeReviews, describes MBA@UNC’s business relationship with the dubious rankings websites as “a tiny subset of a subset of the marketing that we do for the program.”
Cates defends the school’s practice of obtaining these leads. “People become aware of our program in multiple ways, and if we happen to have ads in places where they’re looking for information, whether it’s good information or bad information, that doesn’t have much to do with our program,” she says. “I want to find great students.”
Those students must meet the same admissions standards applied across all Kenan-Flagler MBA programs, Cates says, adding that the school does not pay for positioning in any rankings.
“Our placement of an ad is not an endorsement of a ranking and it doesn’t have anything to do with the ranking itself,” Cates says. “It may be a place where students begin their search.”
When 2U was asked how it justifies paying for leads generated by fake rankings, how much it pays for such leads, and whether 2U believes the rankings are legitimate, company spokesperson Chance Patterson responded, saying 2U has “no role or input whatsoever in the program rankings published by these sites.”
2U said it has severed its relationship with Sparacio and Prato, though Patterson would not reveal when the decision to do so was made. “Our marketing spending with the companies who manage these sites has been relatively minimal,” Patterson said. “In fact, we are not currently spending any funds with the companies and we have determined not to spend with them going forward.”
At U.S. News & World Report, chief data analyst Robert Morse claims U.S. News is the only publication producing “real online MBA rankings” based specifically on data for each program rather than for the whole school where it’s located. Morse questions whether Sparacio’s outfit generates any of its own data. “They’re taking data from U.S. News or they’re using university-wide data, that’s my take,” Morse says. “It looks like they made something up for not any real reason except maybe it’ll generate ads. It’s a model for lead generation, that’s my interpretation. Unless they can prove differently, it’s totally made up.”
When Poets&Quants reached Sparacio, he politely declined to answer questions about the veracity, management, and revenue of his rankings websites, and we couldn’t ask him what a nice philosopher-poet like him is doing cooking up and selling misleading business school rankings. Prato, reached on his cell phone and asked about SeaWaves’ rankings websites, had this to say: “Not interested in talking to you.”
Sparacio is not all mercenary. He was bursting with pride after publishing “The 50 Best Colleges of 2012 Rankings,” possibly the only one of his lists that isn’t a commercially driven mash-up of stars and pine riders. This ranking, though differing substantially from those produced by major rankings players such as U.S. News and Bloomberg BusinessWeek, is free of such institutions as the University of Phoenix, Walden, and Capella. It presents Princeton, Harvard, Swarthore, MIT, and The College of William and Mary as the top five.
“It feels great to make something so good and high quality,” Sparacio writes on his blog, “something that matters.”
Maybe there’s hope yet for this goat farmer.