CNBC Transcript: Interview with Kate James, Global Marketing Officer at Pearson

Marketing|Media|Money profiles the chief marketing officers at some of the world's biggest brands, exploring their careers, their business challenges and how they are directing their significant advertising spend.

Following are excerpts are taken from the latest episode of Marketing|Media|Money with Carolin Roth and Kate James, Global Marketing Officer at Pearson.

PART ONE

CR: Hello and welcome to Marketing|Media|Money, I'm Carolin Roth, and in this episode I'm joined by Kate James, the global marketing officer at Pearson. It's a really great time to speak to you because Pearson has undergone such a major transformation. You were once a sprawling media asset firm and now you're a pure play education business. How difficult is that for your job coming from the marketing and from the branding side?

KJ: I think it's a really interesting opportunity. So you're right, really with the sale of the Financial Times and our share in The Economist last year, that was really the last piece of the jigsaw. And now we're totally focused on education which obviously is a really exciting opportunity, I mean, whether you talk to parents, families, governments around the world, everybody is really clear that to get a better life, you need a great quality education. So I think what that's meant for Pearson is, one, as you say, we've gone from being a portfolio of companies, lots of different businesses, and how do you bring that all together into one global operating company, one Pearson. And equally at the same time, you know, like so many sectors, education's facing a lot of disruption from a digital perspective, now nearly two thirds of our revenue is digital, and the way that people consume education is changing irrevocably. So of course that has significant implications about how we think about our marketing capability and particularly how we think about the brand.

And perhaps if I start with the brand you know when, even a year ago, when we think about Pearson it was really, you know, a house of brands that.. we were you know lots of different customer facing brands, and the shift that we've gone through is really to start to realize the opportunity with the Pearson brand and to move towards a branded house and for an education company, not surprisingly, purpose sitting right at the heart of the brand and that's why we've been really focused. And at the beginning of this year we relaunched the Pearson brand.

PART TWO

KJ: We relaunched it at the beginning of the year, super cost-constrained environment. We're taking the rollout in a phased approach over two years, this year for us was really important about taking our employees on the journey, about building really strong employee advocates because the credibility of the brand really stems from 'do our employees believe in it'?. So a lot of work done internally this year. In terms of the journey that we're in on with marketing, again back to this history of coming from being a portfolio of companies, lots of different business models, lots of different approaches to marketing and also frankly as well, very activity driven and because we didn't look at it from a global strategic approach, not always focusing our marketing efforts where we are going to get the greatest return. So the opportunity for us now is to be able to step back and really focus on those areas where we get the greatest return and also to think about the synergies. So a lot of the work that we've been doing this year in setting up our new global marketing capability is building those centres of expertise.

PART THREE

KJ: It's really early days and, you know, what it is it's bringing their cognitive computing capability with a lot of our content products but specifically at the moment with MyLab and what it does is you know, if you're studying at night, you've got on hand and in fact a virtual tutor, who as well as giving you sort of tips and hints will also really check you understand the concept and then I think, you know, to think of them really, is what they are is the ultimate teaching assistant because they then feed back to the teacher all the inputs that they're getting from that interaction with the student which ultimately, and this is I think the key aim here, makes the teachers even more effective and hopefully also improves the student outcomes. So early days, we're just piloting it in the US, but I think it has really broad global application.

CR: You know I wish I had that when I was a student, it would made things a lot easier. When it comes to the future and your digital footprint, where do you see Pearson going?

KJ: Well as I say, we're already seeing what's happening, you know, two thirds of our revenue now comes from digital, you know we've passed the tipping point. The way that students and future generations consume education understandably is through digital channels. And I think it also gives us this massive opportunity in terms of personalized learning so that you can really shape the learning experience for the individual in a way that we've never been able to do before. And I think it also addresses really big questions around affordability. And if you think about back to this challenge about how do you ensure that students are coming through with the right skills for what employers need going forward, online degrees mean that you have an opportunity to, one, it makes the whole degree much more accessible. It's much more affordable, it means that you can compress the time down. It means you don't have to be studying within a building, you can study virtually. And I think one of the big challenges we have, particularly in the US at the moment, is that with the changing demographic, if we're not careful you've got a large part of the population who aren't going to be able to get a traditional four year degree. And that from an economic perspective is bad news because it means employers are missing out on a whole chunk of the population.

CR: Kate, this might be a slightly left field question, but I just wondered to what extent you are considering or would be considering partnering up with other brands to make the content that you produce for students a lot more fun, to maybe add some recognizable images or brands in there. Have you thought about this kind of collaboration, let's say, have a Batman appear in an educational video, is that something that you might be looking at?

KJ: I think we are always open to how do you make the experience for the student richer and ultimately, lead to a better outcome and undoubtedly part of that is making sure that learning is fun. So if that means that you're gonna have a Batman pop out then you know, that could be absolutely the way forward. We'll see, we're sitting here today in Pearson College, and Pearson College you know we're the first company in the FTSE to be providing degrees but that's only possible through all the other employer partners we work with, so we work with Ogilvy, we're partnering with IBM, with Unilever, with Tesco. So lots of different companies coming in and getting involved. So I'm not sure it's that left field. I think, you know, everything that we do is dependent on partnership and we're always looking for partners that will ultimately add value to the learner experience.

CR: Kate, when I talked to other marketers we talk about some of the trends for the next 10, 15 years. VR usually pops up. Do you see this as one of the biggest trends of marketing or is there something that we're missing?

KJ: I think I see VR as a big trend in most sectors. I don't think it's just ….I mean I think all of us increasingly are seeing the opportunity and want to be able to use it? I mean we definitely are seeing it within the business.

CR: Have you incorporated it so far?

KJ: We've used it a little bit in terms of back to social impact. We're absolutely in terms of being able to give people the experience of what it feels like to be illiterate and all the challenges that that throws up. So yes we've definitely been, and again, the social impact campaigns and I think we also often can take risks and test new innovations that perhaps sometimes we are a little bit more cautious of in some of the mainstream business. So yeah and I think you'll see that increasingly. I mean the question always is the cost and the investment versus the return we're going to get with it. But I think it can be enormously powerful in really building people's sense and understanding of and being able to experience some of the challenges and for that matter, some of the opportunities that you know, I think it's a lot harder to communicate when you don't have, when you're not there and you can't actually sort of tangibly feel it.

PART FOUR

CR: Kate tell me a little bit more about what it's like working here at Pearson and what your typical day looks like.

KJ: Well I don't know if there is a typical day, particularly as actually home for me is in Seattle, we're a UK based company, the biggest market is US, so I spend a lot of time commuting between the states and the UK. I think a lot of my time understandably is spent with employees to really understand what they're feeling particularly as we're going through a lot of change at the moment but also, as well, hopefully I get enough time to get out and really hear from our customers, to go in and talk to students to really get a good understanding. Super important as we think about the marketing plan, super important as we think about the strategy for the business.

CR: What was the biggest change in terms of culture when you came to Pearson? Before that, you worked in the financial industry, in the pharma industry, you worked at the Bill Gates Foundation in Seattle. What was it like?

KJ: Interestingly I think probably [the culture] more closely resembled my experience at the Bill & Melinda Gates Foundation than perhaps it did working at Citigroup or at GlaxoSmithKline. And the reason for that is that Pearson is a very mission driven company. You know an awful lot of the employees who come here are former educators and they come because they want to make a difference. You know, the first week that I joined Pearson it was a sales conference. I was used to sales conferences in banking, in pharma, where it's really hard to go out there and sell and I was amazed by how much time we spent talking about the mission and it really brought home to me just how important the values of the organization and how important it is to make a difference for our employee base.

PART FIVE

KJ: If you look today, there are 750 million people in the world without basic literacy skills. I mean it's a massive humanitarian challenge and when we thought about tackling literacy, we looked at it as a pretty fundamental building block to education. So it had real resonance with the business more generally but then we also thought, okay we're not going be able to do this without partners so Project Literacy is a coalition now of more than 90 partners from Microsoft to USAID.

So, we may be the convener but we're very much just one of a really important coalition. But in terms of, you know, what do we bring, I think we bring advocacy, we bring convening power and we bring marketing capability, we bring campaigning capabilities, so you know one of the campaigns that we ran this year that we're incredibly proud of is our Alphabet for Literacy, which is really looking and saying you know, literacy underpins the solution to all of the big global challenges whether it's gender inequality, poverty, AIDS, HIV… literacy is a building block of the solution. And we put a lot of marketing muscle behind that, we had a 13 million reach. We took exactly the same approach that we would take with any marketing campaign so it started off for landscape with audience insights, we then move forward, we worked with SEB Inferno. It was very much with the same discipline that we'd approach any marketing campaign, we were absolutely looking at for measurable outcome and for the impact of that campaign so you know, yes, it's a social impact campaign. But back again to, you know, we're a brand with social impact at the heart of what we do. And I think it's really important that we treat it with exactly the same discipline and expectation that we'd look at any normal marketing campaign.

CR: So you think it is working, the sort of approach to soft marketing is working?

KJ: Yeah I think absolutely in terms of when we look at this in relation to the brand tracker and when we look at it in the context of favourability then it absolutely is having a positive impact. But I think there's also as well, you know, a year ago we all came together for the general assembly and we all signed up to the Sustainable Development Goals which really set the roadmap. These are the biggest challenges, we need to address them, and I think the private sector alongside governments and everybody else has a really important role to play. As an education company, we're particularly focused on Goal 4, about provision of quality of education but we equally have a role to play in addressing equity and we equally have a role to play in addressing economic progress and employability. And I think that's a really important North Star for the company in terms of, we have a responsibility to make a positive impact and education is really key to delivering that impact.