Are brands building equity or just subsidizing platforms?

As digital ecosystems play an increasingly central role in ad budgets, the advertising industry is seeing the distinction between performance marketing and brand-building evolve. What was once a clear separation has become more integrated, with brands investing in commerce-driven platforms to drive clicks and conversions, while also exploring ways to create long-term value.

The festive season has heightened this dynamic. With seasonal campaigns flooding feeds and retail media networks offering expanded reach, agencies are balancing the goals of delivering immediate results and supporting long-term brand growth. The focus has shifted from whether performance marketing works to how it contributes to both brand objectives and platform opportunities.

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The Short-Term Trap

Ali Zaidi, Senior VP - Media at Tonic Worldwide, doesn't mince words about where most brands currently stand. "If I'm honest, a lot of brands are still stuck in short-term mode. Platforms make it tempting: you see conversions, clean dashboards, and everything looks efficient. But most of that spending just circles around the same users. It helps the platform's numbers more than the brand's."

This is a trend observed across the industry. Brands focus on optimizing ROAS (Return On Advertising Spend), improving click-through rates, and tracking quarterly results, while also considering how their long-term brand equity develops. At the same time, platforms continue to grow and evolve, with algorithms improving and ecosystems expanding. Many brands are exploring how to balance immediate performance outcomes with sustained brand value in this changing landscape.

Performance Harvests, Brand Builds

The fundamental truth remains simple, even if executing on it isn't. "At the end of the day, performance is how you harvest demand, but brand is what grows it," Zaidi explains. "The data's still clear: when you ignore the brand side too long, the performance curve eventually flattens."

This isn't just theory. Agencies working in the trenches see it repeatedly: brands that go all-in on performance marketing eventually hit a ceiling. The same audiences get targeted over and over, acquisition costs rise, and efficiency gains become increasingly marginal. Without brand investment to expand the pool of potential customers, performance marketing becomes a game of diminishing returns.

Payal Vaidya, Chief Experience Officer at VML India, frames it even more directly, saying, "In today's volatile economy, where platforms and tech companies pivot faster than ever, brands simply can't afford to rely solely on platform-driven media. It's crucial to understand the role of these platforms: they are channels, not brand builders."

Her point cuts to the heart of the debate. Platforms have become so good at what they do, so sophisticated in their targeting and measurement, that it's easy to mistake their capabilities for brand-building power.

But as Vaidya notes, true brand equity is created much earlier in the journey. "Platforms can amplify visibility, but they can't substitute for emotional connection. The pull has to come from what the brand means to people: the stories it tells, the trust it builds, the memories it anchors."

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The Emotional Commerce Equation

What's emerging from this tension is a new understanding of how performance and emotion intersect. Vaidya introduces the concept that's quietly reshaping strategy: "Emotional commerce is the new performance. Sometimes it's as simple as a handwritten note, a thoughtful unboxing, or a moment that makes a customer feel seen."

This represents a fundamental shift in how performance itself is understood. It's no longer just about optimizing for the lowest cost per acquisition or the highest conversion rate. It's about creating experiences that convert because they resonate, not just because they're well-targeted. "Spends can buy you reach and conversion, but not loyalty," Vaidya adds. "Platform performance may get a consumer to click 'buy', but brand equity is what makes them choose you again instead of another."

Vaibhav Jain, Head of Media at First Economy, sees this same dynamic playing out across the industry. "Right now, most brands are growing the platforms faster than they're growing themselves. The obsession with ROAS and short-term metrics has made marketers optimize for clicks, not for culture. Platforms are designed to reward instant action, but brands are built on consistent emotion."

But Jain doesn't blame the platforms themselves. "That said, it's not the medium that's the problem; it's the mindset. When creativity meets data with long-term intent, platforms can absolutely build brand equity. We've seen it ourselves: when the storytelling is memorable and not just measurable, the returns compound over time. The platforms aren't the enemy. The lack of patience is."

The Structural Shift Agencies Must Make

The implications for how agencies operate are profound. Zaidi argues for a fundamental restructuring of how success is measured: "Agencies have to start playing both games at once - sell today, build memory for tomorrow. That means two scorecards: one for quick results, one for long-term brand health. If everything is judged by ROAS, you'll keep optimizing yourself into a smaller and smaller audience."

This dual scorecard approach requires creative work that does more than grab clicks. "Creative has to do more than grab a click – it needs to stick in people's heads. Distinct visuals, a repeatable tone, even audio cues, all those details add up over time," Zaidi says. And it requires smarter use of the platforms themselves. "Retail media, for instance, is great for awareness if you plan it that way. Use it to reach new shoppers, not just to chase the same basket."

Jain pushes this thinking even further, arguing that the traditional separation between media and creative has become obsolete. "Agencies can't treat media and creative as two separate departments anymore. The story and the system now live in the same scroll. Every piece of content is both an ad and an algorithmic signal."

This convergence demands a new kind of agency structure and thinking. "The real shift is from campaigns to ecosystems, where data, design, and storytelling talk to each other in real time. The job isn't to chase performance; it's to make performance emotional. The agencies that can humanize data and give creativity a measurable impact will build brands that last, not just trend."

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Beyond the Algorithm

For brand leaders navigating this landscape, the challenge is maintaining perspective amid the noise. Swagatika Das, CEO and Co-Founder at Nat Habit, captures the essential tension: "Brands today are walking a fine line between chasing measurable outcomes and building enduring brand equity. Platform-led media undoubtedly delivers reach, precision, and instant gratification through performance, but when strategies begin and end there, brands risk becoming interchangeable, fuelling the platform's growth more than their own."

The solution, she suggests, lies in understanding platforms as tools rather than strategies. "Real brand equity isn't built on clicks and conversions alone; it's built on emotional resonance, storytelling, and creating cultural relevance that lives beyond campaign cycles. Platforms should act as accelerators, not anchors."

When brands get this right, Das argues, they create something more valuable than campaign performance: "When brands combine performance with purpose, visibility with memorability, and campaigns with communities, they create brand love, a connection strong enough to outlast seasonal spikes or algorithm shifts. The strongest brands are the ones that use platforms strategically to build salience and trust, not dependency. Because in the long run, brand equity compounds, while platform visibility can diminish."

The Measurement Imperative

None of this means abandoning data or reverting to pre-digital brand-building approaches. Instead, it requires smarter measurement. Zaidi emphasizes this: "Run holdouts, test incrementality, and don't let 'data-rich' become 'insight-poor.' If you keep both goals in view, the sale and the story, platforms become brand builders, not budget drains."

The festive season, with its compressed timelines and amplified spending, makes this balancing act even more critical. Brands under pressure to deliver seasonal results can easily fall into the trap of pure performance plays, sacrificing long-term positioning for short-term conversions. But as Vaidya reminds us, "At the end of the day, brands are built in people's minds," not in platform dashboards.

The discussion around performance marketing and platform influence continues to evolve. As platforms become more sophisticated and brand budgets are closely evaluated, the focus is shifting. The key consideration is how brands can leverage performance platforms to support both short-term results and long-term brand equity. How this balance is managed will shape not only festive campaigns but the broader future of brand-building.