[Reality check] Media’s wicked problem

This article is part 8 of a series called ‘Reality Check on Media Strategy’. This post was originally a talk that I had given as part of WAN IFRA’s “AI Unblocked” series with Fathm on July 3, 2024.

In this post, I’ll stitch together 7 previous posts in this series along with my Neiman Labs 2025 prediction piece. The media business is stuck in a wicked problem, which is a complex issue that is impossible to solve definitively because of its intricate interconnectedness and the fact that it involves onboarding multiple stakeholders with differing values, perspectives, and goals.

Why It Matters

Media operators are stuck in tactical hell — endlessly reacting to external pressures, emergencies, or immediate circumstances in pursuit of short-term gains, neglecting long-term strategy and vision. Most resources (time, energy, money) are spent on firefighting rather than building towards sustainable success.

Below is how it feels to be in tactical hell:

• Metrics keep improving or deteriorating without clear causality.
• You are constantly reacting (also called optimizing) to changes made on third-party platforms — SEO, Google Ads, YouTube, etc.
• Boundaries keep getting renegotiated every time there is a leadership change.
• With limited strategic levers, the same ideas are revisited after each leadership change, leading to endless cycles of rebuilding.
• There is constant activity, but nothing fundamentally transformative gets done.

This is not limited to publishers. It applies to anyone whose business relies heavily on algorithmic platforms — whether it’s a media house dependent on Google and Facebook, or a restaurant chain relying on Zomato or Swiggy for orders.

How Media Companies Ended Up in Tactical Hell

Two decades ago, media companies set up their websites and apps as additional distribution channels for their offline operations. What followed was a slow descent into the vicious loop represented in the diagram:

Media Flywheels #3 – Setting up shop in another’s marketplace: Rather than building proprietary technology to manage their owned-and-operated (O&O) platforms, publishers began renting from BigTech — SEO tools, social media platforms, Google Ad Manager, and more. This meant publishers became increasingly dependent on platforms that they did not own, losing autonomy over their audiences and their monetization. 

Media Flywheels #20 – Strategic control compromised: Over-time many of the supply-side and demand-side functions of media businesses got outsourced to BigTech algorithmic platforms. This has negative repercussions on the business:

• Low Capital: BigTech platforms take a significant cut of advertising revenues. For example, Google Ads keeps around 50% of indirect ad revenue. With lower profits, media companies had less to reinvest in their own platforms or strategic growth initiatives.
• Media Flywheels #4 – The Marketplace Owner Knows More: BigTech collects granular first-party data about users in real time, while publishers receive aggregated and delayed insights like Google Trends. This information asymmetry gives platforms immense advantage.

Media Flywheels #18 – Lack of Tech Capability and Capacity: Without capital or data insights, publishers struggled to hire and retain the technical talent necessary to develop advanced ad-targeting or monetization systems. Over time, this led to:

• The first and most obvious risk is the algorithmic platform de-amplifying, demonetizing, or, in the worst case, de-platforming the publisher.
• However, the larger and more prevalent risk is the slow erosion of strategic assets such as brand, trust, owned audiences, and advertisers — all of which are leaving the broader industry in a fragile state.

To mitigate these risks, media companies pursued two strategies:

• House of Brands: Because publishers did not have ad targeting systems, they had to launch multiple niche brands, each targeting a unique audience — Gen Z, women, gadget buyers, etc. But in doing so, publishers fragmented their own audience, pushing users to aggregators like Google News, Apple News, or social media. This led to shorter session times, fewer repeat visits, and lower direct traffic.
• Media Flywheels #21 – Forced Premature Diversification: Lacking capital to scale a single revenue model, publishers diversified prematurely into affiliate marketing, sponsored content, subscriptions, and events. Each added overhead and complexity while contributing minimally to revenue growth.

Both approaches resulted in confused user experiences and split loyalty, further reducing audience engagement and profitability. Users stopped coming directly to publisher platforms, instead migrating to search engines, social media, or even AI platforms like ChatGPT.

Outdated Methods: Without the right supporting technology, media leaders ended up managing their digital businesses with offline management structures:

This lack of adaptability makes it impossible to win a dynamic game with static business rules. Over time, the result is:

• Low Prospects: With fragmented audiences, lower revenues, and poor profitability, media companies struggle to fundraise.
• Low ROI: Investments yield diminishing returns.
• Erosion of Strategic Assets: Trust, brand value, and owned audiences continue to erode, leaving the industry in an increasingly fragile state.

What’s at Stake

News and advertising are a fundamental human need. Both user jobs won’t go away. The unknown question is who will serve these needs in the coming decades.

Apple’s App Store classifies X and Reddit as news products.

Elon Musk is doubling down on this positioning.

Most media publishers need to take on this wicked problem head on by addressing various structural issues identified in the vicious loop at the same time. I’ve highlighted at least one path forward in my Neiman Labs Prediction for 2025.

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Curious how I’m managing to write? I created a CustomGPT for myself, which serves as my go-to editor and audits my first draft. Here’s the link—give it a spin! It’s free to use.

Want to republish it? This post was released under CC BY-ND — you can republish it as is with the following credit and backlinks: ‘Originally published by Ritvvij Parrikh on The Times of India. The author retains the copyright and any other ancillary rights to the post.

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