The 2026 Predictions Podcast

Speaker 0 · 0:07

Hello. Welcome to the first ever podcast from myself, Justin Levin, together here with Ian Whittaker, who's a consultant, adviser, former senior equity analyst, and City AM's analyst of the year, not once, but twice. Ian, I am completely in awe as are plenty of others. I don't quite have those skills, but I will contribute as much as possible. It's bloody great to do this, though, isn't it?

Speaker 1 · 0:32

It certainly is. I think, you know, I and thank you very much for the introduction. That's very, very kind. I think with these things, what it's there are plenty of podcasts out there. You know? Absolutely. But I think as we've discussed this before, you know, what is always good to have is something that really sort of brings together both what's happening in the industry and then also as well what's happening in the wider markets. You know, what's happening sort of when it comes to the economic side, what's happening in the financial markets, sort of the valuation, and so forth. Because, yeah, at the end of the day, money drives a lot of things.

Speaker 0 · 1:07

Yeah. And I think that's what's different out there. I think what we'll try and do over the course of of these podcasts, over the course of the year, is analyze the financial markets while looking at the media and advertising industry and also provide a lot of strategy for media owners, for advertising agencies, for for brands as well. We do a lot of brand stuff too and for the ad tech community. And that and that's what we feel as though is it would be different to this. And the other thing as well is, like, we will cover the latest news and the things that's happening. And I think part of it, or we've called it unfiltered media, is that the benefit of having us do it is that we can genuinely say what we like, can't we? We are we are unfiltered if you like. Yeah. So I mean I mean, obviously, you know, we'll we'll keep our language clean and polite. But,

Speaker 1 · 1:50

absolutely. When it comes to to views on this, sort of you know, I think it's fair to say that neither of us sort of known as shrinking pilots when it comes to having opinions. So and, hopefully, that comes through in the podcast.

Speaker 0 · 2:03

Yeah. Absolutely. And and for those of you worried that if you have to sit here and listen to just Ian and I, we do plan to have plenty of special guests throughout the year to to enrich this podcast. And if you are keen and interested to to be involved, do just reach out to me, send me an email, or DM me on the various socials, and, I will get back to you. Let's kick off. Right? We're gonna do a classic podcast, which is looking at the year ahead, looking at some predictions, looking what's going on in the financial markets today, and how that will impact the media and technology industry. And now it's obvious starting point here. It's been quite the kickoff to the year. We've got now The US, which is threatening the EU. They've obviously there's this dispute over Greenland. I think we can all agree that tariffs are pretty much anti business. And last year, you could say it was a hell of a year for the for the media and advertising world in terms of growth in ad spend. It seems like the financial markets absorbed a lot of the tariff disruption.

Speaker 1 · 3:02

What will happen now, Ian, from your side? How are the financial markets approaching what is going on in the market right now? Well, as you say, there's a lot of turmoil that that we have. We have with situation with Greenland, as you say, with tariffs. Yeah. Also as well, what's happening in the so they're in The Middle East as well with Iran. So short term, you would expect some market volatility. You can already see that, for example, the price of gold and silver reaching records highs, particularly gold tends to be an asset that peoples go to when there are times of volatility and they're feeling uncertain. However, I think it's important here to actually step back, and think about things. And I think there's a couple of of pointers that I I'd say. First of all, for example, they always say in finance, you should follow the money. But in politics, I would say, you also need to follow the votes. And the reason why I sort of mentioned that is that November, of course, is the US midterm elections. And, certainly, from the Trump administration standpoint, it's entirely clear that what they don't want to lose is control of, you know, ideally, both houses of sort of congress from their standpoint, but, certainly, not the senate if they do lose lose the house. Now what does that mean in terms of of many of these policies? Well, I suspect what we'll see is we'll see this volatility in the first half of the year. But as we get closer to the midterm elections, my view is that, actually, we'll start to get a normalization of things. So I don't think we will see this sort of pattern of feeding through. I think when it comes to business and the implications perhaps more directly tied in to advertising, Corporate profitability has been strong. You you mentioned in terms of Mhmm. How it's hidden businesses. But so far, either companies have been able to absorb them, or in many cases, they've actually, passed those costs onto consumers. So corporate profitability in The US is actually holding up extremely well, so when you look at things. And I think Mhmm. Going into 2026, the expectation is that that will continue to be the case. Now you never know what will happen. I mentioned several of the geopolitical factors involved. Yeah. I I'm not gonna predict what will happen in terms of global sort of geopolitics. But I think, generally, when you look at the business fundamentals, if you look at US GDP growth, seems to be holding up pretty well. You look at consumers, they are crumbling in The US, but, again, they are still spending. That bodes well for 2026. And I think, therefore, that bodes well for advertising spending.

Speaker 0 · 5:37

So how do you how do did the financial markets tend to bake in that prediction, don't they, on on the on political outcomes such as, you know, electing presidents. The midterms is gonna be no different. Where are they placing their bets, or is it too soon for for that conversation to be to be happening?

Speaker 1 · 5:57

It's it's far too soon. I mean, the the US election cycle really doesn't kick off. I mean, no real campaigning doesn't kick off until September. If you were to look at where things are at the moment, you would probably say that, yes, certainly with the senate senate, I think it'd be an uphill stretch for the Democrats to take it. The house obviously looks more favorable for that. Typically, what tends to happen with stock markets in a midterm electoral year is they tend to underperform their relative performance. So I think, yeah, from business standpoint, what they tend to like historically are split administrations. One house ruling the the White House, the other ruling congress. I think with this year, just yeah. Obviously, you know, there are there are unusual times. I think the same sort of our pattern will still hold. But again, I don't think this necessarily impacts what happens on advertising spend. If you look at the dynamics for that, typically, the one the single biggest important factor for that is corporate profitability. Yeah. It's corporate who spend on advertising. As long as that holds up, and particularly in an environment where many firms will have to pass on or will try to pass on price increases to consumers, it's likely that advertising will be seen as a strategic decision and not a cost center.

Speaker 0 · 7:21

So let's talk about The US sort of political influence. They've they've been going around the world the last particularly the last year or so, advise help getting governments to not put strict policies in place and legislation around their tech platforms, and it's having some impact. However, some countries, Denmark and others, are starting to legislate against the Metas and Googles. They are they've had a great year. Meta up 22%, and there's been resistance to actually applying any regulation to how they operate because of the Trump administration. Right? The the tariffs start as a tactic, and then he comes in and uses all these other tools and stuff to negotiate with other countries. Do you think with this Greenland issue that their their sort of policy, their foreign policy with with the tech platforms and the influence they have, Do you think that will wane? And do you think that will encourage other nations to perhaps look at the dominance of of Google and Facebook particularly or Google and Meta and start maybe putting a bit more pressure on them?

Speaker 1 · 8:26

Certainly is an issue. I mean, you can already see that, for example, with Amazon. What AWS has said is talk about data sovereignty, which is is a very good first step. The problem is is it comes into conflict with US legislation, particularly the Cloud Act, in terms of really how much data independence there can be for Europe. I think it is true that if you look at the major tech companies, what they did in 2025 was very much align themselves with the US administration, and that, of course, made sense from their standpoint. It also makes sense as well from the administration standpoint. If you look at sort of their what is probably, at the moment, their biggest single geopolitical sort of issue is with China, and a key feature of that competition with China is the race for AI. And, effectively, what the tech companies did extremely well was really link in the health of their companies to the overall US national interests in that particular area. And what that means, of course, is that the administration has gone out to bat for them, as you can see, you know, noticeably in what's happened with the discussions and the disputes over your legislation. The flip side of that, of course, is a situation like this. Yeah. Increasingly with what's happened, you know, the Green Line situation, other things, is that Europe is rethinking it its relationship with The US. And one of the areas that is doing so is very much when it comes to the tech platforms. Now do I think there was gonna be a Mhmm. Sort of a whole scale fundamental change in that relationship? My feeling is at least in the short to medium term, probably not. Too much of the infrastructure is already embedded. But in countries, it's not just what consumers use. It's also as well the cloud services. Realistically, when you look at it, there are only Mhmm. There are three global players, Amazon, Microsoft, and Google, and they're all US companies. So the yeah. There's not gonna be any short term change that comes through from there. I think where we are likely to see legislation passing, my thing is it's gonna be focused on areas, for example, to do with under 16 social media usage. But you've already seen that on Australia. The UK is talking about it today. Also, other countries have come out with that as well. The important thing to bear in mind with that issue, one, it doesn't directly target the revenues of the tech companies. And two, if you look in The US, this is already a bipartisan issue at the state and federal level. So both Democrats and Republicans have taken steps, particularly when it comes to schools, to limit social media usage and more generally, so the mobile phone usage within there. So it's not necessarily controversial from the politics of The US. But, yes, I think we will see sort of, certainly from Europe's side, an increasing view that the tech platforms are sort of let's call it part of the administration's sort of weaponry or armory, and so on. I think the real question is the what could be done on a practical level? And I think that's that's where it becomes more difficult to establish independence.

Speaker 0 · 11:39

Yeah. I'm off, I'm off to Sydney, actually, in Australia, in in about six weeks or so, and I'm gonna come back and see what the response is from the media and advertising ecosystem about that that very bit of legislation that you've just you've just mentioned there about under sixteens not, being able to use social media, see what the impact is, see where it's having any impact on on society too. So we'll come back and maybe we'll we'll we'll do a piece on that to see if there's any impact. You mentioned also that The UK are have commissioned a research piece as well to see, whether they should adopt a similar policy. So be we'll keep we'll keep tabs on that. Just a prediction. I know you hate doing this, but, you know, when we talk to to buyers well, there's there's a there's a fairly negative sentiment, I'd say, to the platforms. They almost resent the sheer volumes that they spend with them, And they say that privately. What they say publicly is completely different. ETA grew 22% last year using dub WPP figures. What do you think their year their twenty twenty six is gonna be like? Do you think they'll grow at that pace, or do you think they'll they'll have a little little bit more of a challenging year? Just a quick prediction, Ian.

Speaker 1 · 12:50

No. I think they'll probably grow around the same pace. I mean, there's a case for saying they may even accelerate. Look. I mean, sort of without sort of, going into a huge amount of this because it it is literally a topic in itself. You know, the thing that I had to realize is you've got, in effect, two advertising markets here. You've got, let's call it, the traditional advertising markets where business goes through the agencies. It's what we all think of as advertising spend. Are they spent by big corporates? Yeah. And from that standpoint, that pretty much follows the traditional patterns, what we talked about, corporate profitability and so forth. Yeah. And that's the part where you probably do see, as you say, some pushback, maybe some sort of switching of spend that goes to sort of other media. Although I would say from a CFO procurement standpoint, online still has a lot of attractions, not least in it seems to have the sort of the air of spend is much more, let's call it, rational in their eyes than other types of spend. But then you have this other sort of of spend as well, which let's compare to an iceberg, which sits below the surface. Arguably, it's as equal to that that sits on top, and that's the spend that comes from SMEs. And bear in mind with SMEs, SMEs, you know, at the end of the day, they do rely on Google and Meta for their outside connection to the world. I mean, it is the equivalent of a physical shop fund in the old days. These days, their shop fund is the site they have on Meta or the site they have on Google search. And that, therefore, means that actually their bargaining power, vis a vis with the platforms, is actually extremely limited, especially as they act to the state of, you know, isolation when it comes to knowing what other buyers are spending in the market, which is not the case when you get with larger advertisers who will have a clue as to what their peers are spending. And I think that sort of part of the market, you know, will continue to grow much faster than the traditional part of the market. And that growth is gonna pull up the sort of the global advertising figures that we see. So, yes, I think global advertising will continue to be strong. I think the platforms in 2026 will continue to have strong advertising spending. But I think it's important to actually see the distinction between what most people in the advertising industry would consider to be the typical advertising market And, actually, what's going on, which, again, is this ecosystem that sits underneath, really sort of out of of most people's visibility, but, actually, for the platforms who probably make 80% plus of their revenues from SMEs, certainly searching Meta,

Speaker 0 · 15:40

is absolutely crucial. Yeah. I totally agree. And and and Meta public about this, the SME market is, 80% of their revenues. And when we talk to advertisers and complain about the lack of regulation, the scam ads, and all the rest of it, you know, even the top advertisers say, look, we don't have the influence with Meta anyway to change their policies and all the rest of it. So, very interesting that you think that their growth will continue. I don't think it will sit at the 20% mark. I just I just can't see them continuing that, but that remains to be seen. Well, you mentioned AI, whopping 1,500,000,000,000 was spent on AI last year. The revenues are obviously not quite coming in. The financial markets are a bit wobbly on it. Is there a bust coming? Is this is this lookingabit.com y? What's your view on on AI?

Speaker 1 · 16:33

I don't think it's looking.com, Ian. I was an analyst during the .com bubble, and there were certainly a lot of different features. Did you predict it then?

Speaker 0 · 16:43

Did you predict it then, Ian? Do I predict it? I take that as a no. I take that as a no. But so so it's not .com, Ian. So it's not this Believe it or not, I was actually quite young then. So, you know, my opinion didn't

Speaker 1 · 16:56

didn't carry so much weight. But at the time, I certainly remember the conversations. Yeah. And it was clear for many of these companies, you know, what was going on with people who were saying, oh, this stock, you know, this is a buy recommendation because it's valued at and I won't mention the company names. It's valued at valued at a 120 times EBITDA, but it's competitive at a 150 times. So the company does value at a 120 is a screaming part. Yeah. There's a lot of that that was going on. There were a lot of companies who essentially were using the .com moniker, yeah, to try and hide what the normal business model. So they were a pet food company, but because they have .com on it, they said they should have an Internet valuation. Nothing wrong with a pet food company, so the but it's not an Internet company. That's not the case now. You have established a pure business model. Crucially, also as well, the spend is coming through, you know, with the possible exception of OpenAI, from platforms who already have tens of billions of cash flow generated every single year, so they can fund this. The reason why I hesitate to say whether, yeah, the bubble will burst or so forth, it is in some ways, it's unpredictable because, as I said, the ability of the companies to continue to fund is still very much there. What will determine whether the bubble, if it is a bubble, will actually sort of pop is the attitude of investors. And that's hard to actually know which way that will go. You've already started to see AI deliver tangible results. And certainly with investors, what they can see are real life applications. Not least, for example, if they look at what's happening in graduate recruitment and, you know, the recorded fall off that's been in in in that area. And so from that standpoint, certainly, the investors can see where there is an opportunity here and where potentially longer term, the money can be made. Now, investors continue to have faith that that will continue, and the medium to longer term path looks quite rosy for AI, and this is not another metaverse where real life applications are extremely limited, then they are likely to continue to fund. However, what they may say, if we get another sort of deep seek moment where China comes out with a model that is much cheaper, and it questions why The US tech platforms are spending so much on the big LLMs. If you get sort of a slip up Mhmm. By one of these companies as well, then you could easily see things turning into a a route. And, yeah, investors, you know, the fundamental point about all this is AI is something that is actually extremely hard to model. Because quite frankly, this is not like an old company or or a gold mine where you can reasonably predict the close. Nobody knows what this is gonna generate sort of over the future. So very much what we're seeing in valuations with the ability to spend and so forth is very much driven by hope at the moment. And the question becomes whether that hope actually lasts long enough where it's translated into real life financial cash flows that investors go, we very much can see now the return we get on these assets, or does it run out? At which point investors go, there's a huge amount of investment quite frankly. It's just yeah. It just isn't so that isn't gonna sustain things. I will say one final point. Bear in mind, the magnificent seven, most of which are not all, you know, certainly not Apple. Yeah. But most of them are sort of seen as AI plays in the stock market. The magnificent seven are around 35, 36% of the S and P 500. It's the 500 most sort of important US stocks that are listed. I go back to what I said at the beginning. Term is this year is the term List list the seven for us?

Speaker 0 · 20:55

Just list that. Let's Yeah. Can you list the seven for us? Can you list the seven? Change.

Speaker 1 · 20:59

It just changed. So it's Alphabet, Microsoft, Amazon Amazon, Meta, Apple, Tesla, and Nvidia. But it it it can change. Broadcom, for example, has been in there as well with things. Yeah. But what's it saying is that, you know, the a lot of US household wealth is tied up in stock markets. The one thing the administration will not want in the run up to the midterms is the stock market crashing. And so, you know, the implication of that would be it would do anything it can to have the valuations of those companies.

Speaker 0 · 21:36

So okay. So it looks like, looks like AI will will be okay. You you've seen now that some of these platforms are introducing advertising which which I loathe. Seems like any little area of attention these days determines that it's an advertising platform which is which is deeply upsetting. And it'll be a shame if these platforms get polluted by it. Like, I get completely frustrated by by Amazon, for example. You go to search for a product that you want, and you get a full page of sponsored ads that aren't even relevant to the search or even related to the brand that you've that you've been searching for. I find I find that experience that's completely oversold, really, really diminished. And I hope that doesn't happen to, to BIO platforms that we're using sort of daily to search and to seeking, advice if you like. So with all these predictions, you what what do you think do you think there's something that could happen in 2026 that we we don't predict, that we we just we just don't foresee? Is there anything like that you could cart with that may happen that nobody nobody will will predict. Can you can you come up with couple of zingers around that?

Speaker 1 · 22:45

Well well, I mean, that's the sort of old black swan sort of question, which by the very nature, sort of quite hard quite hard to predict. So let let's call it sort of grace ones, in terms of where things where things could go. You know, one is that some potential area you could see is that consumers, particularly in The US, finally break when it comes to, price increases that are coming through. And if that is the case and there's a major pushback that goes against sort of continual price inflation, then that is gonna have a significant impact in corporate profitability across whole swaves of the sector, and that will flow down into what happens in advertising spend. We've already talked about what can happen in terms of an AI sort of bubble that comes through. If we talk about the geopolitical side, I mean, I'm not of the view that that Trump is gonna send sort of, you know, warplanes and and sort of invade Greenland. But I do think that, you know, as I say, the world sort of in '20 certainly in the first half of twenty twenty six is gonna be a very interesting place. So, of course, we don't know what's gonna happen, for example, in in, you know, with China and Taiwan, sort of the continuous situation there,

Speaker 0 · 24:01

but also as well what potentially happens in the middle of the pipeline. We could have another war.

Speaker 1 · 24:08

Yeah. We could have another war. That. Which would be Yeah. That that's always a possibility. But I think if you sort of putting that to one side, and I I'd say, yeah, this is just from a personal standpoint. I I'd be more comfortable with what's happening with sort of, China and Taiwan at the moment than I am than maybe it's been the case for a while. Yeah. I think, you know, when you look at sort of, the most likely such if if I had to pick one that would be, say, an area of of potential concern, it would be, let's say, The US consumer breaks down. Yet an increasing percentage of all consumer spend in The States is really driven by the richest categories. And if we look at what's going on, both in terms of prices, but also as well what happens in terms of of, you know, people's jobs, professional jobs, and so forth, what could happen if the market sentiment turns against AI. You know, one potential area would be I don't necessarily think it would happen, but it's simple to look out for, is that US consumers essentially, you know, suddenly crash. And that, of course, then has, yeah, implications across corporate profitability, what it means for the stock market, and that flows on throughout the world. So that perhaps is the one thing that I would, sort of I would look for. The other thing maybe I would also look for as well, which is, you know, flip side of that, is what happens with the struggle over the Federal Reserve in The US. And that, again, will have implications sort of for interest rates. And if we see another push towards very low interest rates, then what does that mean? Well, yeah, it increases funding for areas such as private equity. It probably leads to a slew of IPOs coming onto the market. Certainly would mean sort of the tech company valuations, which tends to do well when interest rates are low, then see a sudden boost as well.

Speaker 0 · 26:03

Yeah. That would be more of a positive, of course. So so on that on that, let's, let's have a look at look at tele. We obviously, work a lot in this space. You you post on this today. Consolidations are gonna happen within the TV space. We know that's going to happen. The big one at the moment is w, WBD and the Netflix deal. What's happening there? Who's gonna win that? What's the likely, outcome in that market? And, I mean, it's an obvious question, but we're gonna see more of this, aren't we, throughout the year?

Speaker 1 · 26:32

Yeah. We're gonna see more. I mean, Netflix is hard to tell. I mean, I I've put it at the moment around $50.50 in terms of, how they could win it. I mean, Netflix is often low cash deal. Its share price, yeah, has gone down over 25 percent in the past six months. It has been under pressure because of its its deal for WBD, so it had to come out with no cash offer. It hasn't increased it. The question with that, of course, is that you've got It increasingly looks as though this will go some sort of legal dispute simply because, you know, there was a question mark there over the valuation of WVD's linear assets, and that's really where the corn out of the dispute between whether you sort of would prefer the Hammar bid or whether you prefer the Netflix bid where the BBD really sits. But as you say, there will be consolidation. Does that necessarily drive further consolidation in The US space? I would argue for the short term, probably not. WBD did have a lot of debt. Yeah. And that did constrain its strategic options. You look at some of the other players. For example, Disney plus is, you know, is quite a a powerful entity. NBCU, Peacock is backed by Comcast, which is, you know, has significant cash flows that comes through, and then you have Netflix and so forth. I think when it comes to Europe, perhaps is a is a far more interesting question because what you're seeing there and you saw last year with Sky making a bit for ITV, the reemergence have talked about what happens with merchants in France, Germany, you're with RTO buying Sky, Deutschland, and so forth. Is that the attitude of even two years ago, eighteen months ago from regulators, the the market they looked at was just the TV advertising market, and that was it. That appears to be softening. And I think, again, this is where it's really linked in with the geopolitical side of things. What there is in the realization in Europe increasingly is that their broadcasting champions are actually quite important, not just from an advertising standpoint, not just from a cultural standpoint, but are the deals as well in this world from a geopolitical standpoint. And I think that will make it more likely that regulators, either indirectly or directly, will come will be pressurized by governments to essentially allow these mergers there and say, yeah, from a standard advertising market sort of, maybe it looks a dominant player. But first of all, we can maybe justify it by including the sort of wider space and platforms such as YouTube, although the whole YouTube, News TV sort of argument is another debate. But also as well that you need to actually allow this deal to go through. Otherwise, there is a significant risk that we lose our national broadcasters and we can never regain them. So, you know, media assets in the broadcasting, you know, in Europe have recently now been seen as strategic assets, and that will have an impact on m and a and particularly how it's viewed from a regulatory standpoint.

Speaker 0 · 29:32

Well, that's a great place to leave on. We will definitely see more consolidation within the TV space and and other areas of the of the media industry. Today, we focused a lot on the financial and geopolitical market. It has been fascinating to hear the insights from Ian. You can expect a lot more from us over the coming weeks and year. If you're interested, do subscribe, and please do get in touch if you would like to feature as a guest. Thank you for your time. Thank you very much, everyone.