Digital marketing has redefined the structure of consumer–brand relationships, particularly among Generation Z, a cohort characterized by continuous digital engagement, rapid information processing, and strong reliance on peer validation. This research evaluates the extent to which digital marketing contributes to brand loyalty and whether such loyalty is sustainable in highly competitive, algorithm-driven environments. Drawing on secondary data from Deloitte, McKinsey & Company, Statista, Pew Research Center, and additional academic literature, the study identifies a structural disconnect between engagement and loyalty. Empirical findings indicate that over 70% of Generation Z consumers discover brands through social media platforms, yet retention rates remain volatile, with significant switching behavior observed across categories. The analysis demonstrates that digital marketing primarily facilitates visibility and short-term interaction, rather than long-term commitment. This is attributed to low switching costs, high exposure to competing brands, and the increasing role of algorithmic content distribution, which continuously introduces new alternatives to consumers. Furthermore, cognitive overload and reduced attention spans limit the ability of brands to maintain consistent engagement over time. The study concludes that brand loyalty among Generation Z is not a direct outcome of digital marketing strategies but is instead mediated by trust, perceived authenticity, and postpurchase experience. As a result, digital marketing should be understood as a tool for engagement generation rather than loyalty creation, requiring integration with broader relationship-building strategies to achieve sustainable outcomes.