Good afternoon,

The Medium identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the media marketplace. The key trends help you answer a simple question: "What's next for media, and where's it all going? How are the pieces lining up for business models to evolve, succeed, or fail?"

Read the three key trends The Medium will be focused on in Q3 2023. This essay focuses on "Artificial intelligence (AI) and cloud computing applications and services are increasingly dictating content consumption."

Amazon’s Q2 2023 earnings report last week generated a lot of buzz in large part because its advertising earnings are up 22% year-over-year ($10.7 billion in Q2 2023 up from $8.8 billion in Q2 2022). Meanwhile, Google’s advertising revenues were up 3.2% ($58.1 billion up from $56.3 billion) and Meta’s were up 12% ($31.5 billion up from $28.2 billion). 

On the earnings call, Amazon executives pointed to machine learning (ML) and artificial intelligence (AI) as the difference makers: “Our teams worked to increase the relevancy of the ads we show to our customers by leveraging machine learning and improve our ability to measure the return on advertising spend for brands. Third-party unit mix increased to 60% during the quarter, the highest level we've ever seen, and we're continuing to see good growth in the number of sellers and the unit sold per seller.”

And that’s the other reason it generated buzz: AI has been the big buzzword on earnings calls: there were 25 mentions on the Amazon call, 65 mentions on the Alphabet earnings call and 54 mentions on the Meta earnings call. It is not clear if Wall Street simply has identified total mentions as a key metric for estimating future business success, or whether they actually believe it is a game-changer.

I have had a hard time finding examples of the key trend “Artificial intelligence (AI) and cloud computing applications and services are increasingly dictating content consumption.” Not because they don’t exist. But because they tend to focus on the wonkier elements of walled gardens (like this good essay — “An internet of silos” — from The Martech Weekly’s Juan Mendoza) or go deeper into how “the possibilities of activating data have increased manifold” because better data tools and the adoption of the cloud data warehouse.

Amazon offered an unusually helpful example. And it’s worth briefly diving into the logic of what we learned.

Key Takeaway

Because Amazon's earnings call treated AI as more than a buzzword, we now have a minimal window into Amazon's role in shaping the future of advertising and media.

Total words: 900

Total time reading: 4 minutes