Frequently used in the computing industry for many years, the word was only recently coined in higher education as a way of describing digital application platforms that operate in this way.
Universities incentivise recruitment agents by paying higher commission rates for larger volumes of enrolled students. The aggregator business model exploits this economy of scale by batching together applications to achieve the maximum commission rate per application.
The last couple of years have seen the multiplication of many commission-club type operations, which appear to rely on scale to generate external investment rather than sustainable income. These fast growing networks, with new and exciting interfaces, have disrupted the market but are questionably profitable at this stage.
There is much skepticism about the practice and the term aggregator has quickly formed connotations of dislike and disapproval in parts of the sector, with many student recruitment companies seeking to distance themselves from the label as a result.
Higher education is notoriously adverse to explicit sales terminology and this is certainly a contributing factor to the distaste. Sales communications attuned to agent profit margins rather than student support seem to be a common hallmark and have not gone unnoticed by a majority public sector audience.
Speaking on stage at The PIE Live London back in March 2022, Patrick Whitfield, chief commercial officer at Adventus introduced himself to the audience by confessing, “My name is Patrick – I am an agent aggregator”, acknowledging the fact that the term has quickly become synonymous with industry suspicion that needs addressing. “We tend to describe ourselves as a marketplace,” he went on to explain.
A recent finalist for The PIEoneer Awards 2022 decided to withdraw their submission after being nominated alongside other companies perceived to be aggregators. The reputational risk of being seen in the same category was apparently too great despite the potential upside of being commended by their industry peers for their work.
On closer inspection, none of the student recruitment companies actually refer to themselves as aggregators. The use of the phrase originated from the higher education sector searching for a term to describe the new breed of digital agent networks. What is increasingly clear, is that those who are deemed to be in this category have a reputational challenge.
“The term ‘aggregator’ means different things to different people”
“The problem with broad brush, catch-all labels, is that they often cause confusion and misunderstanding by putting apples and oranges in the same basket,” explained Justin Wood, director of university partnerships, UK and Ireland at ApplyBoard.
“The term ‘aggregator’ means different things to different people, failing to advance understanding of the real opportunities and risks that are out there for students, institutions and recruitment partners alike.
“Tech plays an important role in simplifying the student journey but our people remain paramount, whether that’s our relationships with institutions, recruitment partners or across our 1500+ strong ApplyBoard team,” Wood continued.
For decades, universities worldwide have worked with tier one agents who operate on exactly the same business model by managing agent networks in specific regions of the world to achieve greater numbers for their university partners. It seems only right to question why these companies are any different,
There is plenty of irony in hearing universities purport not to work with aggregators, who are clearly contracted with master agents who leverage a subagent network for recruitment.
Speaking from the recent BUILA conference, Hersha Pandya, executive director of partner relations for the UK at M Square Media, reflected “the term aggregator may be relatively new but the practice has been around for a very long time”.
“Unfortunately it now has a negative connotation attached to it which detracts from the benefit the practice can bring to both students and institutions,” Pandya said.
While some organisations may be trying to distance themselves from the term, there is a unique opportunity to build trust in the practice through transparency and over-communication about the supply chain. Increased focus on dispelling the negative assumptions can in fact build emotional connections with stakeholders who are frustrated with a lack of regulation in current agent networks.
Whitfield, also speaking at the BUILA conference explained, “If we assume and agree that subagent models have existed for a long time – and actually this is a forward step in a pre-existing model – then the question becomes ‘what are the benefits of a more technological approach to managing agents?’
“That’s where we’ve [Adventus] seen a real appreciation from our clients about the ability for technology to provide a greater degree of transparency than ever was available before.”