As traditional and innovative approaches converge, marketers are evolving to stay ahead. Legacy brands are now allocating up to 30-40% of their budgets to digital and performance marketing, while D2C brands remain focused on performance marketing, dedicating 60-70% of their budgets to this strategy. As the industry navigates this shift, a key question emerges: which approach will prove to be the winning strategy—traditional branding or performance marketing?For decades, legacy brands like Godrej, Nestle, HUL, Colgate Palmolive, and TTK Prestige have relied on traditional branding to create strong emotional connections and establish trust. These brands have historically prioritised traditional campaigns through media agencies, viewing them as the most effective way to maintain a consistent brand image across diverse consumer demographics. The advertising budgets for media agency-led campaigns are substantial, and they focus on building awareness and affinity for the brand. They’ve mastered the art of storytelling, weaving narratives that tug at heartstrings and create lasting impressions.
“Brand-building remains crucial for medium to long-term equity that drives future sales and ensures long-term health for the brand. Today, digital transformation and data-driven insights have amplified the role of performance marketing, which is more focused on converting consumers in the purchase cycle. Both have a crucial role to play,” says Sumeet Bhojani, Head of Brand & Strategic Insights, Godrej Enterprises Group. He further states that brands must integrate storytelling with measurable performance metrics to maximise the impact. He acknowledges that there is a very real danger of overindexing performance marketing since it is much easier to tie it to conversions and hence ROI! He explains, “Over the past three years, we have doubled our digital advertising spend, and we would be close to 40%-50% today, on average. Over the years, Godrej Enterprises Group has emphasised digital platforms such as social media, CTV, OTT, and search campaigns while maintaining a strong presence in traditional media like TV and print.” He revealed that Godrej’s current percentage on performance marketing would be in the range of 30-40%, up from about 10-20% three years ago, driven by the rapid adoption of online platforms across the stages of the customer journey—from discovery, research and consideration building to eventual conversion as well.
Gaurav Tayal, Divisional CEO of Matches and Agarbatti Division at ITC, says, “At ITC Mangaldeep, we believe in the 50-50 long and short rule, where we put equal emphasis on long-term brand building and short-term measures to drive demand and achieve target growth. Further, given the incense category is highly fragmented with regional and local players having over 50% share, the only way to create a differentiation is to build a strong emotional brand proposition, and that’s what the brand has been working towards.” According to Tayal, non-traditional performance and social media promotions take up about 20-25% of the brand’s marketing spends. He adds that on the back of increasing penetration of digital platforms, an increase in data consumption by TGs across demographics and markets, and the brand’s endeavour to be present across all consumer touchpoints, these spends have been increasing consistently. He further explains, “While looking at the metric of only the cost of reaching one user in silo would show that the cost of performance marketing is lesser while compared to traditional branding.”
For TTK Prestige, a household name built on decades of trust, brand-building remains a top priority. However, performance marketing has become equally crucial, enabling real-time consumer interaction on digital channels. The company has seen a significant shift in its marketing mix, with digital marketing now accounting for 30% of its total spend.
“Performance marketing facilitates real-time consumer interaction on digital channels. Until recently, we had a 90:10 ratio of conventional and digital marketing, but it has changed to 70:30 now as Digital keeps on expanding exponentially. In the digital arena, performance marketing has 60% of the share, with branding and engagement activities having the remaining 40%. For e-commerce, in particular, performance marketing has an even bigger chunk at 80%, with branding chipping in 20%,” says Anil Gurnani, Chief Marketing Officer of TTK Prestige. This change is a rethinking of how brands budget, which is being influenced by the increase in online consumption. Gurnani adds that, while the brand has been increasing their spends on performance marketing, it is not taking away from other channels. “It’s about getting the balance right to maximise reach and engagement,” he says.
“In terms of reach and visibility, when comparing traditional marketing with digital marketing, traditional media such as TV and print still take the lead for us in terms of budget allocation in each. Yet, performance marketing is noted for its cutting-edge targeting and potential to cause immediate conversions, thus being a very useful medium to support the brand’s business development. The lines between mass media and performance marketing are blurring as consumers move seamlessly between platforms. A TV ad can spark interest, and digital ads can continue the conversation, leading to direct conversions. The future lies in integrating both, creating a unified brand experience that’s impactful, measurable, and consumer-driven,” he added.Legacy brands like Finolex Cables Ltd. have also changed their allocation in performance marketing — from about 10-15% in the past 1-2 years to around 30-40% now. Amit Mathur, President of Sales & Marketing, Finolex Cables, says, “Historically, our marketing strategy has been heavily skewed towards traditional brand-building initiatives, ensuring strong visibility and long-term recall. However, over the past few years, especially after the pandemic, we have recognised the growing importance of performance marketing and have started gradually increasing our investment in the space. So, you can say currently our allocation towards performance marketing, including platforms like Meta, Google, and Instagram, remains relatively small compared to our overall budget. However, we see significant potential in leveraging data-driven strategies to enhance customer engagement and drive measurable results. So, with this in mind, we are planning a substantial shift with a goal of increasing allocation to Digital and performance marketing to approximately 40% in the coming year.”
On the other hand, D2C brands and startups like Mamaearth, Swiggy, Nykaa, Zoff Foods, and Atulya from Khadi Natural, are making a conscious shift towards performance marketing. These brands, often operating with leaner budgets, are leveraging data-driven advertising on platforms like Google, Meta, and influencer collaborations to target specific consumer segments. Every marketing dollar spent is tracked, optimised, and retargeted for maximum efficiency. The focus is on driving immediate conversions and measurable ROI. These brands are agile, adaptable, and always on the lookout for the next big thing.Shaifali Gautam, CMO, CaratLane, says, “We spend almost 60% of our marketing budget on Digital. Out of that, about 10% would be on media spends on platforms such as Meta, YouTube, etc. And we have one of the most robust top funnel, mid-funnel, and last mile systems. Once we acquire the consumer in the mid-funnel, we actually convert them into contactable prospects. We nudge them. We have very robust system in mid-funnel where we personalise our communication and offering to our consumers. And we nudge them to therefore convert.”
Zoff Foods allocates a significant majority of its ad budget to performance marketing, with around 90% focused on driving direct conversions. However, as the brand matures, it’s shifting its focus towards building long-term brand equity, with traditional branding now accounting for around 10% of its ad spend.“As we work toward building long-term brand equity, traditional branding has gained a larger share. Factors influencing this shift include increased competition, the need for brand recall, and consumer trust-building. The cost of performance marketing has increased due to rising competition and platform saturation. CPCs and CPMs have gone up, making it essential to optimise creatives, audience targeting, and funnel strategies. However, the ability to track every rupee spent still makes it a compelling choice for growth-oriented brands,” says Akash Agrawalla, Co-Founder, Zoff Foods.
Wonderchef allocates a significant portion of its ad spends to performance marketing, with a rough split of 55-60% for performance marketing and 40-45% for traditional and offline branding. As an omnichannel brand, digital marketing plays a crucial role in driving both online sales and influencing offline purchases.
“We were among the early adopters of performance marketing in our industry. In 2015-16, Wonderchef was one of the first brands to go live on Amazon and launch a D2C website—long before D2C became mainstream. However, CPMs and CPCs have increased steadily, especially on high-intent platforms like Google and Amazon. To address these rising costs, we focus on first-party data, audience segmentation, and content-driven organic strategies to complement paid efforts,” says Ravi Saxena, Co-Founder & CEO, Wonderchef.
As a digital-first brand, IGP allocates approximately 70% of its ad spends to digital performance marketing, driving immediate results. However, the brand also recognises the importance of traditional branding, dedicating around 30% of its budget to building long-term brand equity.
“The cost of performance marketing has also risen over the years, with CPM increasing by 2x due to growing competition in the digital space. Additionally, CPC rates have steadily climbed. However, we have adapted to these changes through a robust CRO (Conversion Rate Optimisation) strategy, continuously enhancing our offerings and refining our customer journey to ensure that our marketing investments yield maximum returns despite the increasing costs,” says Tarun Joshi, Founder & CEO, IGP.com.
“Approximately 90% of our ad budget is dedicated to performance marketing, with just 5-10% allocated to brand marketing. From the outset, we have been a performance marketing-driven company because of its measurable impact, clear attribution, and data-driven optimisation. However, as we expand into offline retail, we plan to gradually increase our branding investments, ensuring a more balanced and holistic marketing strategy. Initially, our entire marketing budget was channelled into performance marketing because it offered precise tracking and immediate customer acquisition,” says Ganesh Sonawane, Co-Founder & CEO, Frido. Over time, as the brand scaled, they began exploring brand partnerships, starting with Royal Challengers Bangalore as their first major collaboration. While branding still represents a smaller share of their budget, Frido’s upcoming offline expansion will drive a more strategic blend of performance and brand marketing to strengthen their presence across multiple touchpoints, adds Sonawane.
D2C brands and startups are shifting towards performance marketing, leveraging data-driven advertising on platforms like Google, Meta, and influencer collaborations to target specific consumer segments. At Atulya from Khadi Natural, the brand balances performance marketing with storytelling and credibility-building efforts.“At Atulya from Khadi Natural, we recognise the importance of both strategies. As a D2C-first brand with a strong retail presence, we leverage performance marketing to engage digital-savvy customers while also investing in storytelling and credibility-building efforts. Our digital campaigns focus on transparency, ingredient efficacy, and customer experience, ensuring that each touchpoint drives both engagement and conversion. Meanwhile, our brand collaborations and content marketing initiatives align with long-term trust-building goals. The future of marketing lies in striking a balance. While startups may expand their branding efforts as they scale, legacy brands will continue to embrace data-driven strategies to complement their traditional efforts,” says Gaurav Singh, MD & CEO, Atulya.
So, which approach is more effective? The answer lies in the data. Performance marketing offers unparalleled measurability, allowing brands to track every click, conversion, and dollar spent. This level of accountability is unmatched in traditional branding. However, traditional branding has its own strengths. It builds brand awareness, establishes trust, and creates emotional connections that can last a lifetime. In a world where attention spans are shorter than ever, traditional branding offers a unique opportunity to capture hearts and minds.
Legacy brands are struggling to adapt to changing consumer behaviours, focusing on strengthening their bottom funnel, while new-age brands are prioritising top-funnel brand building. This shift highlights a key conflict in marketing strategies.
Gurjot Shah Singh, Head of Digital Planning, EssenceMediacom India, explains, “A lot of legacy brands are making rather desperate attempts to strengthen their bottom-funnel, and that’s happening a lot with FMCG, Auto and erstwhile categories, whereas a lot of new-age brands have been able to succeed in selling their products well and now are focusing on their top funnel, which is building the brand. While there is a conflict, there is also a huge learning opportunity for us as marketers and an industry. If you look at the bottom of the funnel, or the crux of the conversation, it’s about how these brands evolve from their DNA and how they are evolving faster than the consumer ships.”
Citing an example, Gurjot says, legacy brands have built so much equity or ad-stock — that the ad-stock for a brand like Dabur is such that if they stop advertising today, at least for the next two years they will still be remembered by the country. However, they need to evolve fast and move towards more personalised messages and messages at scale. He added that they end up just reaching out to audiences at large, but what they’re not doing is they’re not speaking to audiences in a personalised manner.
“I truly believe that any brand, whether new-age or legacy, that moves beyond its existing DNA and evolves it in response to customer needs and changing consumer behaviour will be the one that survives. I feel legacy brands will face a war. They might survive in the long run, but over a 20-year span, they could fade—though they may still sustain a five-year lifespan. Legacy brands are in a warfare, whereas D2C brands operate from a war room,” he further states.
“The balance between brand-building and performance marketing is shifting based on company stage and industry. Early-stage startups focus heavily on performance marketing for immediate revenue and growth, while mid-stage startups begin integrating brand-building as they grow. Established companies, on the other hand, adopt a hybrid model, balancing performance marketing with brand loyalty efforts. Finally, the legacy brands are the ones to prioritise brand-building but also use performance marketing for short-term sales. Legacy brands are incorporating performance marketing alongside traditional media. While they still invest heavily in TV, print, and billboards for brand recall, they selectively use performance marketing to drive digital sales and short-term conversions. Mass media is blending brand-building with performance marketing, both proving beneficial in the short and long-term,” says Rajiv Gopinath, Chief Solutions Officer, Publicis Media Services.
He further added that newer companies typically experience higher CAC, as they rely heavily on paid ads due to limited brand recognition. Early-stage startups, especially, see higher CAC as they focus on customer acquisition through digital campaigns. As companies grow, CAC stabilises through organic growth and better retention strategies. Established digital companies and legacy brands, with strong brand equity, benefit from lower CAC, relying more on loyalty and market dominance rather than immediate ad spend.
“D2C brands are looking forward to a lot of Google, Meta, etc to drive their overall performance marketing and they are also looking forward to e-commerce and quick commerce to drive their overall performance marketing. In fact, people are moving out of affiliate marketing because they realised that they aren’t able to get new users. Legacy brands have already started asking for performance marketing. For example, if they have a Rs 10 crore media budget, earlier they were only spending Rs 8-9 crores in pure brand-building and the rest Rs 1-2 crores in performance marketing, but now its become like — they will first bifurcate where they will allocate in e-commerce, online, etc, that’s separated and then they use the rest in brand-building. Like trade was a vertical earlier, now e-commerce, quick commerce or D2C performance has become one vertical in spends for them. Electronics, fashion, beauty, FMCG, home & lifestyle, they’re all using a lot of performance marketing from the perspective of sales, whereas auto and finance are using a lot of performance marketing in terms of driving leads,” says Shradha Agarwal, Co-Founder & Global CEO, Grapes Worldwide.
Legacy brands are shifting their marketing strategies, allocating a larger share of their budgets to performance marketing, particularly in e-commerce and quick commerce. This trend is driven by the need for measurable sales-driven results, with different industries leveraging performance marketing in unique ways.Manjul Wadhwa, Founder & CEO, Anagram Media Labs & Inflyx, says, “Customer acquisition costs (CAC) for D2C brands are generally higher than traditional brands because legacy players benefit from established brand trust and an existing distribution network. Traditional brands rely heavily on their B2B distribution channels (wholesalers, retailers, and sales networks), reducing their direct-to-customer acquisition costs. Their brand equity, built over decades, provides a soft launching pad, lowering their reliance on aggressive digital marketing. On the other hand, D2C brands compete fiercely for customer attention in the digital space, increasing CAC.”
“Over the past few years, the ad spend on performance marketing has witnessed a significant rise, particularly in the retail sector. Earlier, the average spends ranged between Rs 20,000–Rs 30,000 per campaign. However, in the last 2-3 years, this investment has scaled up to Rs 1,00,000–Rs 1,50,000 per campaign, indicating a substantial shift in marketing priorities. This increase is primarily driven by changes in consumer purchase behaviour, growing digital adoption, and a higher emphasis on ROI-driven marketing strategies. As brands move towards measurable and data-driven advertising, they are willing to allocate larger budgets to performance marketing, ensuring that every rupee spent contributes directly to customer acquisition and revenue generation,” says Bala Kumaran, Founder & Director, Brandstory.in.
D2C brands face higher customer acquisition costs due to intense competition and lack of brand trust. On the other hand, traditional brands invest in long-term branding efforts, which may be costly in the short term but yield better results in the long run. The gap between D2C brands’ customer acquisition costs (CAC) and those of traditional brands is narrowing due to rising ad costs and competition. As digital transformation accelerates, legacy brands are shifting their budgets towards measurable, conversion-focused campaigns, blurring the lines between traditional brand-building and performance marketing.
“While D2C brands may have a more streamlined digital-first approach, their customer acquisition costs (CAC) tends to be higher due to competition and a lack of established brand trust, often ranging from Rs 200-500 in India, compared to Rs 800+ for traditional brands. However, rising ad costs and competition are narrowing this gap. Traditional brands investing in long-term brand-building (e.g., TV, OOH) see higher CAC short-term but better lifetime value (LTV) due to brand recall. Many industries are blurring the lines: even traditionally brand?heavy sectors like automotive, real estate, and luxury goods are increasingly experimenting with performance tactics to complement long-term branding,” says Prady Kumaar, CEO and Co-Founder, NP Digital India.
But here’s the thing: the lines between traditional and performance marketing are blurring. Legacy brands are starting to dip their toes into performance marketing, recognising the value of measurable ROI and targeted advertising. Meanwhile, D2C brands and startups are beginning to explore traditional branding, realising that building a strong brand image and emotional connection with consumers is crucial for long-term success.
“One is not existing in silo of the other; 2-3 years back, performance and traditional brand building had very clear demarcation, but as of now and as we go forward, that demarcation is actually not there; one is flowing into the other. Earlier, for example, influencer marketing was used for building consideration; today, you use influencer marketing to build your brand, to build consideration and also to result in purchases, so all those lines are blurring and everything is becoming a seamless integration,” says Parveen Sheik, Head of Business Intelligence, GroupM.
Manjul says, “While performance marketing is being increasingly adopted, traditional brands don’t rely solely on it, ensuring that it complements their existing brand equity and distribution strengths. However, the lines are increasingly blurring, as even traditional sectors (like FMCG and automobile) are exploring hybrid models. Performance marketing spending is often proportional to industry size and digital penetration. There is a clear shift in how brands—both new-age D2C startups and legacy players—are approaching their marketing mix. While D2C brands are now exploring traditional branding to strengthen credibility, traditional players are experimenting with performance marketing to optimise digital reach. The challenge for legacy brands is to balance their retail presence with digital-first approaches, while startups must ensure sustainable CAC and LTV growth in a highly competitive digital landscape.”“Legacy brands are increasingly recognising the value of performance marketing. The ability to track ROI in real-time and adjust strategies accordingly is enticing. This shift is evident as traditional brands allocate more of their budgets to digital avenues, aiming to complement their existing branding efforts with performance-driven campaigns. D2C brands, on the other hand, are now realising that while performance marketing is great for fast sales, long-term brand love requires traditional branding efforts too. Mamaearth and boAt have started investing in TV and OOH ads, acknowledging that performance-driven digital marketing alone isn’t enough to build an iconic brand. Zomato runs quirky billboards and print ads, ensuring recall beyond digital screens,” said Mehul Gupta, Co-Founder & CEO, SoCheers.
As the marketing landscape continues to evolve, one thing is certain: the future belongs to those who can balance art and science, tradition and innovation. Perhaps the most effective approach will be a hybrid model, one that combines the strengths of traditional branding with the measurability and agility of performance marketing.