D2C brands rethink digital ad strategies as spending surges toward $700 billion

Direct-to-consumer (D2C) brands are increasingly relying on digital advertising, with spending expected to exceed $700 billion by 2025. However, many brands focus heavily on short-term performance marketing, leading to a "leaky funnel" where growth stalls once ad spending stops. As D2C brands scale, they often see diminishing returns on their advertising investments. A lack of strong brand identity and reliance on major platforms like Google and Meta limits their long-term potential. Many brands are now bringing digital marketing in-house to develop more sustainable strategies. Agencies are urged to adapt by balancing short-term performance with long-term brand-building. Emphasizing multi-channel strategies and data-driven insights can help agencies support D2C brands in achieving sustainable growth and improving customer retention.