What is the future of the digital economy?
David Gehring is an interesting mix of entrepreneur and digital media executive. He has started two of his own businesses, worked in senior partnership roles for YouTube and Google and, most recently, has become the Guardian’s first hire on the West Coast US. His career, however, began in the world of enterprise software. He reflects on that period with no sign of rose tinted glasses. “After 10 years in enterprise software, I realized I really don’t like enterprise software.” Fair enough.
That explains his move into consumer facing businesses in 2006.
A year at a Toronto headquartered, mobile video startup, was followed by a first foray into founding a business, which happened to be a digital media company. Famplosion was the result, a startup aggregating local event data for the family audience. “We raised some angel money, built some pretty awesome technology and wrote a zillion scripts to try and optimize how we were managing a lot of incoming data feeds.”
Two years working on the technology led to Gehring and his team attempting to raise a Series A round of funding in the summer of 2009. As he describes, “it was probably the worst timing in the history of America to try and raise venture capital for a digital media company.” The struggle meant the company ran out of money and had to be shelved. Despite this, the focus on digital media remained and Gehring hasn’t looked back.
From Google to the Guardian
A year building out relationships within the digital economy for SmithGeiger, a media focused research and strategy consulting firm, led to the growth of relationships with the likes of eBay, Yahoo! and crucially YouTube. “Through my conversations with YouTube, I started to learn more about Google and because the firm that I was working for was so ingrained in the news world, I was starting to become pretty familiar with the economics of the news business and how devastated news organizations were.”
It became apparent that the growth of the digital economy was not happening fast enough to offset the decline of the traditional media economy and Gehring believed Google should do something about it. He applied for a job at the search giant, which he likens to an application for a masters degree and he had his thesis thought out. “I went into every meeting and said ‘it may or may not be Google’s fault but Google is one of the greatest beneficiaries that has disrupted the news media economic situation adversely and it has an opportunity to do something about that. I wanted to play a role in fleshing out Google’s engagement in that opportunity.”
YouTube was the first port of call but after two years of running news partnerships for the company, it became clear to Gehring that YouTube’s business model wasn’t going to play a material role in the economics of the news business. His next role was effectively an internal consultant role, ensuring Google’s business units were aligned in terms of business development with news organizations.
As part of that, Gehring was exposed to the management teams of many of the world’s leading outlets to discuss how they could best work with Google. “I met Andrew Miller (Guardian CEO) and Tony Danker (International Director at the Guardian) and we really hit it off. One thing led to another and then three months after that initial conversation I ended up joining as VP Partnerships, which was really unexpected.”
Although Gehring may look back at his time working in the enterprise software space without much affection, it was that experience of carrying a sales quota which he believes has had the biggest impact on his mentality as a digital media executive. “All of my initial business development experience was for the sake of establishing routes to markets and channels for our revenue, so I look at partnerships from the perspective of what are some ways for two entities to work together that allow for greater economic opportunity for both.”
In the context of media today, Gehring believes the potential for partnerships is enormous. “We are in this historic, transitional period in which it’s no longer the case that content creators also own the vehicles through which the content is distributed. The owners of those vehicles by which the content is now also engaged with and consumed are digital platforms. It’s Google, it’s Facebook, it’s Twitter and then it’s a bunch of others who are attempting to become the next Google, Facebook or Twitter.”
What does this mean for traditional media companies? According to Gehring, it means creative thinking about how to engage with these digital platforms to build a wide audience and monetize that reach. Gehring suggests that now might be the time where that is possible. ” The first 15 years of the digital economy were not very conducive to achieving broad distribution and monetization. Now, with a lot of the recent developments in adtech, there is an increasing opportunity to do both. That is tremendously exciting, particularly for the most quality or trusted brands.”
A belief in quality
Part of the reason behind Gehring opting to join the Guardian, is due to his fundamental belief in the notion that quality journalism will rise to the top of an increasingly convoluted digital content economy. “The digital economy is growing at an exponential rate, on a moment to moment basis. and as the digital landscape gets bigger and bigger, the relative value of the brands that are perceived as quality becomes more and more acute.”
It is that perceived value that Gehring believes will be able to be monetized, particularly through the development of supporting technology and he is adamant that the Guardian is in a position to capitalize. “For me, the Guardian is the most quality journalism brand in the world. That for me presents an incredible opportunity in an increasingly diluted digital economy.”