Trend: (D)Evolving Consumer Behaviors

Welcome to the Loop. In an economy that feels increasingly like financial whiplash, consumers are inevitably feeling the squeeze - whether they feel it directly or not. In this issue, we’ll take a look at the confluence of factors resulting what seems like a shift in today’s consumer mindset.

This Week in Digital Marketing

• Consumer Segments’ Changing Behaviors

• Meta faces antitrust lawsuits, Gemini 2.5 Flash introduces “budget thinking”, OpenAI alums sell billion-dollar ideas

• OpenAI goes WindSurfing

• … one sentence

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Newest Insights on Customer Engagement

💳Paying Later: The financial volatility in the recent months have had consumers feeling wary of their balance - what seemed like a reserve now is more of a liability. Buy now pay later giants, such as Klarna, are temporarily easing the symptoms while having a record year in profits. Gen Z and millennials, who have been Coachella’s primary attendees are increasingly turning to BNPL services. After forking over a $41 upfront fee, festivalgoers spread out the remainder of the $600 ticket over several months. The recent partnership with Doordash reflects the consumer demand for debt financing even on Taco Tuesday.

💸Tariff Tightenings: Reeling from the recent tariff announcements, Temu, Shein, and Amazon have been in a rare agreement - collectively anticipating price hikes. Consumer confidence didn’t leave unscathed - a staggering 76% now report plans to significantly reduce non-essential purchases, with 43% already cutting back on everyday luxuries they previously considered untouchable. Dining out, entertainment subscriptions, clothing, and electronics are facing the steepest cliffs in spending intent, with only truly essential categories maintaining any stability.

🚶Evolving Priorities: Marketing during economic uncertainty requires understanding these evolving priorities. According to a classic study by Harvard Business Review, brands that survive don't just slash prices. Companies that grasp the psychology of downturns can thrive by segmenting consumers and tailoring strategies accordingly. The winning approach? Smart brands are reframing value propositions around quality, sustainability, and emotional connection—giving consumers permission to spend on products aligning with their values.

THIS WEEK IN THE LOOP

Headlines on Digital Marketing, AI, and More

🧑‍⚖️Crackdowns Underway: Meta's antitrust trial against the U.S. Federal Trade Commission (FTC) is underway, with CEO Mark Zuckerberg testifying this week in Washington. The FTC argues that Meta's 2012 and 2014 acquisitions of Instagram and WhatsApp were anti-competitive in social networking. Meta counters that the FTC's case hinges on a narrow definition of the market, ignoring competition from platforms like TikTok and YouTube. The trial began on April 14 and could last 8+ weeks, with 50 witnesses expected, including Sheryl Sandberg and Instagram co-founder Kevin Systrom. If the FTC wins, Meta could be forced to divest Instagram and WhatsApp—a move analysts say would not only disrupt Meta’s $1.3T ad ecosystem but impact how Big Tech grows and competes.

🧞‍♂️ Thinking Budgets: OpenAI may have dominated the conversation this week, but Google is shipping right alongside them. Google just launched Gemini 2.5 Flash — a hybrid reasoning AI in preview that matches o4-mini, outperforms Claude 3.5 Sonnet on reasoning/STEM benchmarks, and introduces a new ‘thinking budget’ to optimize cost vs. quality. The release features a “thinking budget” (up to 24k tokens), which fine-tunes the balance between response quality, cost, and speed. Available via API through Google AI Studio and Vertex AI, it is also appearing as an experimental option within the Gemini app.

🎓OpenAI Alums: AI’s hottest side hustle right now? Founding your own lab. OpenAI alums are raking in serious cash, with Mira Murati’s Thinking Machines Lab reportedly aiming for a $2B raise at a cool $10B valuation—despite not having a public product yet. Not to be outdone, Ilya Sutskever’s new venture, Safe Superintelligence, just scored another $2B in funding at a whopping $32B valuation. That’s a lot of zeroes for companies more focused on ideas than deliverables (so far). Still, investors seem eager to bet on the brains behind the bots, proving that in AI, the minds building the future may be the biggest product of all.

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🏄‍♂️OpenAI Goes Surfing: The company is reportedly in talks to shell out $3 billion for Windsurf, an AI coding assistant formerly known as Codeium (not a mall brand, we promise). CEO Sam Altman seems ready to plant a flag in the growing “vibe coding” space—where developers tell AI what they want, and the bot spits out the code. Think: ChatGPT with a keyboard and caffeine.

🔝Code Gold Rush: Meta, Google, Anthropic—you name it—have all put coding front and center in their AI efforts. The Windsurf chatter comes just as OpenAI dropped Codex CLI, a new open-source tool that lets its latest models (hello, o3 and o4-mini) generate code straight from your desktop.

🛅This isn’t OpenAI’s first dance. The company had already tried (and failed) to buy Cursor from Anysphere, another AI coding startup it had invested in. With Windsurf, OpenAI’s angling for a spot in full-stack development—front-end, back-end, all of it—putting it in closer competition with Anthropic, GitHub, and other major players.

🤖Existential dread. OpenAI’s own product chief says 2024 is the year AI beats humans at coding—for good. In 2023, AI could only crack 4% of coding problems in a test. This year? 69%. And GitHub says over 90% of US developers are already using AI assistants. If the Windsurf deal goes through, expect a coding arms race—and maybe a few raised eyebrows from antitrust regulators.

SPOTLIGHT

Meet AVA - Your Artisanal AI BDR

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Funding Secured: Artisan announced it has raised $25 million in Series A funding led by Glade Brook Capital, with participation from HubSpot Ventures, Oliver Jung, Day One Ventures, BOND, Soma Capital, Sequoia Scout, and others. Y Combinator also continued its support.

What Artisan does: Led by Jaspar Carmichael-Jack, Artisan creates AI Employees (called Artisans) and software that is easy to use  and replaces the endless stack of point solutions. This funding will be used to replace repetitive work with AI employees and build better work software for humans in the process.

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