After a week's break, the hosts return for results season and find the big platforms posting a spectacular year — alongside eye-watering AI investment that the markets, for now, are happy to wave through. Ian walks through the numbers and the Wall Street reaction; Justin presses on what it all means for the advertising and media industry.

In this episode:

Alphabet's results: Search ad revenues up 19% year on year (vs 17% the prior year), YouTube up 11%, total ad growth 13%, and cloud revenues up a "massive" 63%. Far from cannibalising search, there's a case AI is accelerating it.
The cloud CapEx story: AI investment is now showing up in cloud growth across the board — Google Cloud +63%, AWS +28% (its fastest growth in 15 quarters), Azure +40%.
Regional splits: US ad growth up 23% (vs 17% prior year), EMEA at 12%, APAC at 22% — an unusually wide US/EMEA gap worth watching.
YouTube vs Search: Once the faster-growing engine, YouTube has now trended below search for several quarters.
~$200bn in AI spend — and markets didn't blink: Investors don't punish spending per se; they punish spending without a visible return. Diversified revenue streams (Alphabet, Amazon, Microsoft) buy more tolerance.
Meta's single pillar: Growth around 23%, but advertising is ~90–98% of revenue, leaving it more exposed. Q2 guidance — possibly deliberately conservative — weighed on the share price and reflected a deeper concern about reliance on one engine.
How Meta is growing: Pricing up ~12% and impressions up ~19%, fuelled by more (AI-driven) content. WhatsApp scaling from ~1m to ~10m conversations a week.
Where the growth really comes from: SMBs (≈85% of the market) and likely Chinese advertisers. Large advertisers are decelerating — guideline data cited shows US Meta growth falling from 27% ('23–'24) to 14% ('24–'25), UK 15% to 10%, Canada ~10% to 4.5%.
Is the money leaving? Probably at the margins — but not obviously to traditional media. More likely diversified to other online platforms like TikTok (a Bloomberg report cited ~60% revenue growth expected for 2025).
The measurement angle: Advertisers running geo-testing and switching off spend to test incrementality — echoing Google's Latin America episode. A friendly disagreement on whether moral/regulatory pressure (EU breach claims) is pushing brands to dig deeper.
Amazon: Advertising up 22% ex-currency, AWS accelerating to nearly 30%. The hosts argue advertising and AWS — not retail — drive the profit. Roughly ~$200bn annualised AI spend; shares up ~4% post-close.
Coming up: Guests in the next few weeks, including Guideline, plus a proper measurement discussion.

As always: this is most definitely not investment advice.

Key takeaways

AI hasn't hurt Google search — it may be helping: search ad revenue accelerated to +19% YoY, with cloud up 63%.
Markets tolerate huge AI CapEx (~$200bn at both Alphabet and Amazon annualised) when growth visibly follows the spend.
Meta's vulnerability isn't its growth (~23%) but its reliance on one engine — advertising at ~90–98% of revenue.
Meta's growth is increasingly powered by SMBs and likely Chinese advertisers; large-advertiser growth is decelerating across the US, UK and Canada.
Spend leaving Meta isn't obviously returning to traditional media — TikTok and other online platforms are the more likely beneficiaries.
Advertisers are increasingly using geo-testing and switch-offs to prove incrementality, with moral/regulatory pressure prompting deeper scrutiny.