Capitol Alert

UC spent $158,000 on campaign to counter critical state audit

In the wake of a scathing state audit released in March, the University of California mounted a $158,000 publicity campaign to dispute claims that its admissions policies had disadvantaged resident students.

The campaign included a report rebutting the conclusions of the audit; digital ads on websites, Facebook and Twitter; and sponsorships on public radio stations throughout the state, according to documents obtained by The Sacramento Bee.

Dianne Klein, director of media engagement and strategy at UC’s Office of the President, said no state or tuition revenue was used for the campaign. She said it was paid for out of the “endowment cost recovery fund,” which collects a small percentage of endowment earnings for administrative purposes, including projects to enhance the university’s fundraising efforts.

“Negative tends to stick in the public’s mind much more than positive news,” she said. “Rather than let a blemish take over the whole state, so to speak, we felt it was necessary and good to get out a positive message.”

Klein added that it is common for universities to run publicity campaigns showing what they are doing for their states.

“I want to stress that we do this routinely,” she said. “This was not unique.”

UC’s response to the audit, however, was unusual. The state auditor’s office could not recall any previous reports that had generated a similar campaign.

“Most auditees generally respond to our report by submitting a formal response to our draft report, which we include in our published report,” State Auditor Elaine Howle said in a statement. “Although not common, some departments may also issue a press release with a statement the day our report is published. However, we had never experienced an auditee issue a separate report the day we publish our report.”

Assemblyman Mike Gipson, the Carson Democrat who requested the audit, said he was “outraged” by the spending on the campaign. He said it was representative of UC’s general approach to the audit: “damage control for damage they brought on themselves,” rather than considering its recommendations and doing business differently.

“I am in total disbelief once again,” he said. “They have taken this elitist attitude that they can do whatever they want to do whenever they want to do it.”

The audit, which was released March 29, caused a major stir when it asserted that recent university policy changes allowing campuses to set their own enrollment targets and keep the revenue acted as an incentive to favor nonresident applicants, who pay a supplemental fee on top of their tuition.

It pointed to an 82 percent increase in the number of out-of-state and international undergraduates between the 2010-11 and 2013-14 school years, coinciding with a 1 percent drop in Californians, and said it appeared that thousands of residents had been displaced from the system.

In its response, UC sharply dismissed nearly all of the auditor’s findings and suggestions, which UC President Janet Napolitano called “neither accurate nor helpful.” The university has long contended that its enrollment strategy was necessary to offset steep budget cuts during the economic recession and that nonresident supplemental fees help underwrite thousands of slots for Californians no longer covered by the state.

But its publicity campaign originated after an exit conference with the state’s auditor office more than a month before the release of the final report. On Feb. 24, representatives for the auditor presented their findings at the UC’s Office of the President to solicit comments from the university before issuing their draft audit.

“It was a very disturbing meeting from our point of view. They had reached conclusions that we strongly disputed. It was very unsettling,” UC’s Klein said. “Based on that meeting, it seemed they were pretty set on their conclusions.”

Klein said she subsequently came up with an idea that became the seed of the campaign: Instead of a traditional response to the audit, UC would compile its own report about admissions and finances and then “amplify the message of it” statewide.

“We strongly believed we didn’t have anything to be defensive about,” Klein said.

The colorful, graphics-laden document, “Straight Talk on Hot-Button Issues,” was released online hours after the audit.

Without mentioning that report, its 32 pages collect many of the arguments about UC’s mission and operations that the university has highlighted during recent budget and legislative battles: Its undergraduate student body remains overwhelmingly Californian. It continues to recruit increasingly racially and economically diverse applicants. It has been forced to turn to alternative sources of revenue because state funding has not kept up with enrollment growth.

To assist with publicity, UC turned to SKDKnickerbocker, a national strategic communications firm that has worked on corporate mergers, political campaigns and issues such as the legalization of gay marriage.

“There is no company that better understands the intersection of press, politics, and policy,” the firm touts on its website. “And there is no better place than SKDK if you are in need of strategic communications advice to manage a crisis, protect a brand, advocate an issue, or win an election.”

Klein said the company conducted “market research kind of stuff,” but that UC was primarily responsible for developing the campaign, from the concept to writing and designing the report to creating the ads.

“What SKD did was messaging, and does this sound better than that, and pushing that out,” she said. “The strategy was all ours.”

Though she initially confirmed, in a phone call and follow-up emails, the scope of the campaign, Klein said in a subsequent conversation that only the rebuttal report was a direct response to the audit. She said the digital and radio buys were already planned, would have happened regardless of the audit, and their messages about UC enrollment merely aligned with the focus of the rebuttal report.

Documents obtained by The Bee, however, include two analyses of the online advertising effort that refer to it as the “UC Audit Campaign.” The subject of a group email between agency representatives and UC marketing and public affairs staff members outlining the digital buy is “SDK (sic) timeline re: audit messaging.”

The campaign centered around two weeks of online advertising following the release of audit, initially focused on the Sacramento area.

Many lawmakers have been highly critical of the university since the November 2014 announcement of a plan to potentially raise tuition by more than a quarter over five years, particularly about the rapid growth of international and out-of-state students at its undergraduate campuses, though others have come to UC’s defense.

“Part of this effort was to show the Legislature the positive message about UC,” Klein said.

But after a furious response to the audit rippled far beyond the halls of the Capitol, UC moved quickly to broaden the scope of its response. In an email on the morning of March 30, the day after the audit’s release, one of the SKDKnickerbocker strategists working on UC’s account sent an analysis of tweets about the report.

About 84 percent of the tweets were coming from California, though primarily from outside Sacramento. Shira Fine, the strategist, wrote, “If we’re able to increase the ads to a statewide target we’ll be more effective in getting the message out to these audiences.”

UC spent about $19,000 on banner ads for websites featuring pull lines from its rebuttal report: “Four Out of Five” UC students are Californians and “42%” are the first in their family to attend college.

The ads generated 3,480 clicks through to its website, according to an analysis prepared by SKDKnickerbocker, about 0.1 percent of the people who saw them, for a cost of $5.42 per click. Aaron Golds, senior digital strategist and vice president for the company, wrote in an email that it “is very strong response rate, slightly above the industry average we see for display advertising.”

Almost $12,000 went to promoted Facebook and Twitter posts sharing links to a Sacramento Bee editorial urging readers to “keep perspective in (the) fight over out-of-state students” and, a few days later, a Los Angeles Times article about the boost in California resident admissions that the university had just announced in a news release. More than 10,000 readers clicked through to the stories.

Another $4,100 was spent sharing those same articles on Outbrain, a service that recommends links through a widget embedded on websites. The articles were seen most frequently on, and, according to the SKDKnickerbocker analysis, and received about 2,450 clicks.

However, the majority of the spending went to sponsorships on public radio stations in San Diego, Sacramento, San Francisco and Los Angeles. The brief spots, read on air ten times weekly during morning and afternoon commutes, touted UC’s support for the program and its commitment “to expanding and sustaining access for California’s students.”

“Eighty-four percent of undergraduates enrolled on UC campuses come from right here in California. More at University of California dot e d u,” read one script.

In mid-March, before the audit was released, UC made eight-week buys with the four stations at a cost of $123,000. Klein said UC’s marketing communication team has employed the strategy before to “get out the message about our financial aid programs, our applicants, that sort of stuff. It’s a public announcement sort of thing.”

“If you hear it on radio or whatever, it has an impact,” she said. “It broadens it. It enhances the conversation.”

Earlier this year, UC Davis was engulfed in controversy after The Bee uncovered that it had contracted with outside consultants for at least $175,000 to bury negative online references to the November 2011 pepper-spraying of students and improve the reputations of the campus and Chancellor Linda Katehi.

Napolitano ultimately suspended Katehi pending the outcome of an investigation into whether she made “material misstatements” regarding her role in those contracts, as well as allegations of nepotism and misuse of student fees. Napolitano’s letter to Katehi outlining her concerns, however, did not criticize the use of outside consultants to burnish UC Davis’ image.

Alexei Koseff: 916-321-5236, @akoseff