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Conversations about the media economy, and how to think clearly when things get messy.
This is Puzzle Problem Mess, conversations about the media economy and how to think clearly when things get messy. My guest on this episode is a man who's been described in some quarters as Madison Avenue's de facto chief economist, and that man is Brian Wieser. Brian is CEO and principal of Madison and Wall, a North American advisory and consulting firm specializing in the global advertising market. Brian has spent his career looking at the media and advertising industries from multiple vantage points. He's been an investment banker at Lehman Brothers, an award winning Wall Street Analyst at Deutsche Bank and Pivotal Research, a senior executive at two of the world's largest advertising groups, Interpublic and WPP, and CMO of advanced television business, Simmel Media.
Dan Fahy:Really, Brian is an industry analyst, financial analyst, and market strategist all rolled into one and has an authoritative view on where advertising money is moving, why it's moving, and insofar as this episode is concerned, what those shifts mean for broadcast and streaming media. This episode will give you a lot to think about. I hope you enjoy it. Here's Brian Wieser. Brian, welcome to the podcast.
Brian Wieser:Thanks for having me.
Dan Fahy:It's a great time to speak with you as you're just releasing Madison and Wall's 50 market global forecast. So if we could start with how we should best understand the current movement of advertising money between categories or channels. It's relatively well understood which categories are growing or not and by how much, but perhaps less well understood is how the money is moving around underneath the categories. What are you seeing?
Brian Wieser:Yeah, well, think that the first thing to be mindful of is that the trends that are playing out globally are common to almost every country on earth. And the good news is it makes our job kind of easy or a lot easier in that you have relatively strong social platforms, commerce media, and search. And then you have weaker in general traditional media, but pockets of growth, right? Outdoor in general holds up reasonably well in most countries. You have inside of individual media like television, connected TV obviously doing well, but mostly taking share of an existing medium.
Brian Wieser:Same true for digital audio inside of audio, Right? So those trends tend to play out almost every country on earth. And it does make analyzing it relatively easy. That's not entirely true. It takes a lot of work to actually build up the historical estimates with some degree of confidence and then forecast against those numbers.
Brian Wieser:But those are probably the main takeaways to be mindful of from a growth rate. But the other piece is to understand that the kind of growth that we're seeing is arguably unsustainable. We're seeing at a global level double digit growth or slightly better than double digit growth for 2026. Some markets like Australia are growing slightly lower. We expect 6% growth for the ad market this year, which is not terrible, but it's also not the same, not as robust as it is in some markets like The United States.
Brian Wieser:I guess the other underlying driver to keep in mind that maybe is not as obvious is that what we see marketers doing is consistently choosing price and performance in favor of transparency and control wherever they can. And so that reinforces if you will the position of the platforms and it's not about the consumer because last I checked consumers don't spend money on advertising but businesses do and businesses make choices for a whole bunch of reasons which are only incidentally related to consumers who might inform share choices within a medium, but not choices across media.
Dan Fahy:Can we briefly roll back to your observation that the growth outlook looks pretty healthy, but you have some concerns about its sustainability. What's giving rise to your concerns?
Brian Wieser:Well, lot of this is captured in The US thirty year treasury bond. The political strategist James Cardell said once, I want to die and get reincarnated as the bond market. It is really important to pay attention to. What's going on with the Treasury markets right now is that you have elevated cost of capital, elevated rates essentially for three year U. S.
Brian Wieser:Treasuries, which are due to several factors. One is a really high level of debt first in The U. S. But also in many markets around the world. And second, you have concerns that inflation is elevated in part because of elevated levels of government spending, but also a mismatch, if you will, between government spending and proceeds that they bring in from taxation or from other otherwise.
Brian Wieser:But more to point that higher level of inflation, which is also due to other factors like rising tariffs and rising levels of trade barriers and other things that are really not very positive for the global economy are a permanent feature. And that there is no seriousness, at least again in The United States, it causes the rest of the world to have consequences. But there's no serious effort to properly curtail inflation and make sure it stays under 2% or 2% or lower in The United States. And so those factors are playing out, and they reflect bigger long term risks. But the other piece that's embedded in what's going on with the thirty year Treasury is high related capital expenditures and capital raising.
Brian Wieser:And the fact that there is debt being raised with a thirty year tenor and crowding out the market, which is causing interest rates to then be higher. And then you see governments around the world whose cost of capital are benchmarked to the US treasuries to be higher. And this creates a whole bunch of other issues. So the risks to the economy are greater than that, but they encapsulate, or they're well encapsulated certainly in this dynamic that's been playing out. You just have also all sorts of other unusual and not positive forms of government intervention, what you see going on with the weird way in which The US intervened the Japanese yen market by selling euros and just distorting markets around the world.
Brian Wieser:And of course, where I am in Canada, these unnecessary trade wars playing out that are also harmful and could have all sorts of other knock on effects, which almost certainly will outlast the current administration.
Dan Fahy:Fascinating. Thanks for explaining that. And if we turn to TV or premium long form video, why do you think TV is out of vogue when video isn't? Your data shows that there's resilient consumer demand for an advertiser spend on video, but money still seems to be leaving TV. What's going on there?
Brian Wieser:Well, noted media planner, Winston Churchill, once said that television is the worst form of advertising except for all those others which have been tried. And so there's all these flaws of television that make it work, for lack of a better word. But the reality is that there are other less bad alternatives for all of their flaws. So we can point to how bad digital platforms are. And I guess if Churchill were a planner today, maybe you'd actually say meta is the worst form of advertising except for all those others.
Brian Wieser:But the point is that all media is flawed. Marketers make choices for a whole bunch of different reasons. And those reasons disfavor television at the present time. It's independent of consumer action. It doesn't matter that say in Australia you have a generation to come that under the age of 16 mostly won't experience social media or in countries around the world.
Brian Wieser:Right? It's not it's not about, you know, they lose the habit of consuming digital platforms. Digital platforms mostly sell what marketers want to buy, flaws at all. They sell performance. They sell relatively low cost price in support of that performance, and it's all good.
Brian Wieser:It doesn't matter that television supports performance as well. Maybe it drives it even more. I actually liken television and mass media and awareness driven media is like an air force to the army of performance media. Right? One makes the other way more effective than being without or doing them in isolation.
Brian Wieser:Arguably, if you underweight one of them and you overweight the other, and I'm arguing in this case, again, the air cover of mass media and mass awareness driven media easily makes the more tactical performance based media more effective. But it doesn't matter because that's not how marketers are thinking. It's not how they're making decisions, it's not how they're budgeting. So we can make a very clear observation that because it's not perceived to be driving performance is losing share in most countries on earth.
Dan Fahy:You mentioned that advertiser favoring price and performance over transparency earlier on, and there's another dimension to that, which is the... Just the ease and convenience of doing business with the platforms versus TV. How much is that playing into spend decisions, the sort of the ease of transaction?
Brian Wieser:I mean, it varies. I think that if you are a smaller marketer, on the one hand, it's easier as long as you have people who know what they're doing. And because you can buy the medium, it's not possible for the most part to cost effectively buy non digital platforms for smaller marketers. But for large ones, arguably, was never easier than just picking up the phone after you've had a nice lunch with someone and say, Yes, I would like some of your gross ratings points, please. That's pretty easy.
Brian Wieser:So I don't know. I don't think that that's the thing. I think there's always sources of friction inside of the workflows that can be factors that can constrain spending choices. But I think you see it more in the it's less about television and digital platforms in general. Television has already been made so efficient.
Brian Wieser:That's why the cost to execute is de minimis versus digital platforms, by the way, where I mean, it's still order of magnitude more expensive in terms of the workflows involved by digital platforms. So I don't think that's true. I think that where the ease of buying is a problem is arguably outdoor where you have different creative needs, you have different completely different measurement needs, you have different physical media needs that are not easy to manage in a very low cost way at all. So I think that's the one place I'd suggest where ease of working is an issue. I think that's an issue with television.
Brian Wieser:And I think that the ongoing efforts to make processes simpler, which I think in the television world, both sellers and buyers are really used to doing. And remember, if you think about Media Ocean or its equivalents, the Donovan data systems going back to the 1960s, the original ad tech lived in television.
Dan Fahy:Fascinating. Fascinating. And just going back to your analogy around the air force and the army, I think that you have cautioned that TV shouldn't overdo its chasing of performance media spend or performance characteristics. Has TV made a bit of a mistake in letting the digital platform's more quantitative narrative become the dominant theme in advertisers spend at buying decisions?
Brian Wieser:I'm not saying they shouldn't chase performance. I'm just saying they won't succeed. Subtle difference. No. I...
Brian Wieser:But I think it's the way they've gone about it that's a problem. I would argue that at the end of the day, marketers have expressed strong preferences that would be hard to overcome. And to suggest to marketers that they're wrong to focus on performance I think is a that's the losing battle. So the question is how do you alter your offering? Or do you accept that you've got really limited growth and now you've got to take a different set of strategies or you focus on non advertising based revenue models?
Brian Wieser:I mean, is also a valid pathway. That's the strategy where you say consumers actually have a shockingly high tolerance for paying for content, notwithstanding our own individual complaints about I can't believe Netflix price just went up again. Well, reality is that as a form of entertainment, it remains incredibly cost effective. And in countries where cable or satellite or other forms of pay TV already existed, you're getting a cheaper option and you're replacing spend with one provider of a service from another. And so total spend on video services doesn't necessarily go up that much, even price increases rise for individual providers because you swap out your legacy system in favor of a Netflix or an Amazon or a Stan or any other service that you want to get.
Brian Wieser:But I think that if you are a TV based seller of advertising, you believe performance is the right way to go. I mean, there's two pathways. One, you let your content be sold by someone else who credibly sells performance. A retailer who can say, yeah, we got we sell performance and we execute using all sorts of different media. The retailer has credibility selling performance.
Brian Wieser:Right. Marketer there's what the marketer wants. They want awareness, but what they can buy and pay for is performance. So that's enough. That's one strategy where you just resell or let someone else be a reseller.
Brian Wieser:The other is you say, Okay, well, we're we're actually going to go create our own performance network. We're going to partner up with all this digital inventory. We're going to package it together as one big performance media channel. And we're going to invest a ton in trade marketing around how we're the best performance media there ever was. But no one's really trying that as far as I know.
Dan Fahy:Fascinating. And it does lead into the next topic around what broadcasters are doing with each other. There seems to be a drumbeat for broadcaster consolidation, particularly in UK and Europe. However you and Luke Stillman take a more circumspect view of the value of this and I think part of your skepticism is that these moves may just protect margins but they don't necessarily solve for the audience and revenue decline and I think you've gone further in saying that banding together also keeps the broadcasters in a more protected environment from a regulatory point of view which is ultimately harmful for their competitive prospects or agency. Do you want to talk a little bit more about that and your thinking around the outlook for national broadcasters?
Brian Wieser:Yeah. And I'm now... As you say it, I'm now reminded of a clip used to make about agencies, two drunks holding themselves up at a light post or something along those lines. There's an inventory stuck in my head. It...
Brian Wieser:It's not that bad, though, but I think there's certainly the markets that I've looked at closely, you you see broadcasters complaining, complaining, complaining about the global platforms. Taking their share and how advertisers for all their claims of patriotism and supporting their local broadcasters and local content and blah, blah, blah, they keep spending and spending and spending with The US based digital platforms. And then I look at what the incumbent broadcasters are trying to do. They're trying to relive the 1980s and 90s where they're these great protected markets by regulators and they want the world to stay that way where the marketer had no choice but to buy them. And that's not a great solution either.
Brian Wieser:I would argue that the idea of consolidating inside of a market only serves to encourage more regulatory capture, which doesn't exactly foster innovation. It doesn't allow a company to realize the economies of scale that are possible. And so I would argue that it's not a long term good strategy to simply try to consolidate inside of a market. The focus should be on growing across markets, establishing best practices that play across markets, learning from other markets, and figuring out how you can apply internal investments at greater scale. You see Europe in particular is being open to investment.
Brian Wieser:So it's kind of surprising that non... Other non... Well, non American investors haven't really looked at it. You see media for Europe really is the only even European broadcaster meaningfully trying to pursue cross border activity. You don't see Canadian or Australian or others who probably would benefit.
Brian Wieser:Again, it's not, like, the most obvious synergy because, I mean, content doesn't always play across territories, but content rights might. But infrastructure and I think best practices also play well across borders. So it's not like you're going to actually then do a cross sale again of like Brazil and Germany. Not very many marketers have those two markets and you're not going to get any skill. But if you had a large position in both of those markets, I'm inclined to believe that you are better positioned to compete with the global platforms than if you did neither.
Brian Wieser:And the reality is that I think more broadcasters need to think in terms of having positions in 10 markets. Again, we saw of ICOM or others who arguably had lots of little stakes, but not a lot of big stakes or not enough big stakes in different markets to make this strategy play out. But I think that the focus, there's more to be gained in the long term by maintaining an active investment portfolio on a global basis than by trying to concentrate inside of market because I think it just leads to complacency.
Dan Fahy:Fascinating. Thank you. I guess a broadcaster could look away from its peer set to the global platforms themselves, and we've seen some examples of that. There's TF1 in France with Netflix, and there's other broadcaster platform commercial partnerships being spun up. How do you at Madison Mall see that?
Dan Fahy:Is that a fruitful path forward for a broadcaster?
Brian Wieser:Yeah. I mean, I think the experimentation, like, in the form of Tiffany or other repackagers, resellers, thinking about... I mean, Netflix and Amazon are two partners that I think a lot of network groups probably will benefit from working with. The specific economics of those deals, don't know. I mean, we'll see how that works out.
Brian Wieser:But I think that a better... The best strategy for anyone who wants to be in the television business probably involves creating a subscription business or looking at non advertising revenue streams because it's really hard, if not impossible, to imagine the turning of the tides.
Dan Fahy:Looking at the small medium enterprises segment, how much of a thing is the emerging SME class of advertiser in your view? Has traditional media properly appreciated or taken the opportunity presented by this pool of new advertisers?
Brian Wieser:Yeah. Well, we think that there's a fallacy that's really informed a lot of strategies around the world. The main fallacy is that, oh, small, medium sized businesses are growing faster than the overall market, and therefore, we wanna capitalize on that. Therefore, we need to have products that can, you know, work with those players. And that's how we get some of that sweet, sweet meta and alphabet money.
Brian Wieser:Problem is only data that we've ever seen and come across tells us that pretty consistently the small medium sized enterprises are not growing faster than large ones. They're growing roughly the same pace. All of the rapid growth that we saw from Meta and from Google came because they were able to consolidate the market for those players. They were able to make it not that small businesses have never had many choices for buying, but the difference is, you know, thirty, forty years ago, the choice a small business had to buy for were from their local monopoly yellow pages, their local monopoly newspaper, and maybe their local radio station. You think about the low cost $10,000 a year advertiser, the low budget advertiser, they realistically only had a small number of choices to work with.
Brian Wieser:They today have maybe three choices to practically work with, maybe two for the most part. And that's where they, if you're spending $10,000 a year, is it cost effective to spend with any more than that? No. But the difference now versus thirty years ago is it's the same sellers, whether you're in Seattle, Washington, in Toronto, Ontario, or Sydney, Australia. It's the same three choices.
Brian Wieser:That's what's different and that's what's been the core source of the growth they've seen from the largest platforms. So when large businesses are trying large sellers of advertising are trying to chase that market, what they're going to compete for a tenth of that $10,000 a year? On what planet does it make sense? Spend any time putting a thousand or $2,000 to work, given the labor involved in managing it. Because mechanically, that would be a thousand dollars would be $80 a month.
Brian Wieser:Is that time invested, cost effective rather than just putting more money into the big platforms? No, not for the most part. Now, there's a more middle sized marketer where it will make sense. But we would argue that a lot of that money is coming in at least in The United States and in some other markets where the markets are developed. It's a reconcentration of budgets that were going to smaller sellers.
Brian Wieser:So local in The United States, TV station groups or local cable where the unit costs were low, you could buy geographically defined constrained regions with relatively low cost. That money is now going to the Plutos and the Tubes and to other forms of connected TB. And so it's a reconcentration of the budget with the so called national sellers or entities that have national inventory too. It's not that it's driving growth in the market. It's just capturing it from other players.
Dan Fahy:Yeah. Fascinating. The the theme of money moving around of spend being relatively stable, but the direction of it changing is coming through. What what are you seeing around the balance of power and influence in the ecosystem at the moment?
Brian Wieser:Yeah. Well, I I think that again, Meta and Google and Amazon and those who've made significant investments in their capabilities, whether AR or not are clear beneficiaries. Their share of the market grows, but they're not the only ones. And we can point to the likes of Reddit or Pinterest. Could look even, Snap's not doing that well right now, but even if you look at them over multiple years and periods of time, they've actually become a pretty successful business, all things considered.
Brian Wieser:But you can go down the list and TikTok, of course, goes without saying. They continue to take share. I think it's it's true that the players that invest the most in AI have also been the ones to benefit, but it's more that they're just investing in their own business. And I think that's the common driver. Now AI will help them to figure out better ways to sell, ways to manage inventory.
Brian Wieser:So that's always true. And the sheer volume of inventory that they have to work with, the number of discrete units means that they benefit meaningfully from having those tools. But just being a player in terms of you know, AI, whether being hyperscaler or building models isn't necessary to capture growth. I do think that being outsized in investment is critical. I give you the example again of, you know, if marketers want performance based media, however you get there is what matters.
Brian Wieser:Now does that involve AI in this day and age? It's kind of like thirty years ago saying, yes, we're going to use computers. Yes, that will make you more efficient. And that's really the goal. AI isn't a thing that's different in this context.
Dan Fahy:Perfect. Brian Wieser, thank you very much for your time today.
Brian Wieser:Thanks for having me.
Dan Fahy:That was Brian Wieser. And do check out the Madison and Wall podcast for a weekly snapshot of advertising market news from Brian and his colleague, Luke Stillman. Thanks for listening. I'm Dan Fey. Original music by Lee Roseveer and So Cow.
Dan Fahy:And if you like this episode, please share with a friend or colleague.