MAM
TV commercials dying a natural death in Germany: Mercer study
BONN: Television commercials will soon be a thing of the past and are going the way of dinosaurs, according to a new study in Germany. Mercer Management Consulting Agency has urged TV network executives to start planning for the “post-commercial age” of broadcasting.
The study adds that the new creeping revolution will comprise of commercial-free premium subscription channels, pay-per-view events, tele-shopping and interactive services. Networks with more innovative “viewer-interactive” programming will be better placed in the near future.
The alarming study asserts that declining commercial revenues in Europe can only partially be blamed on the continent’s sluggish economy. The study adds that the digital revolution will pave the way for a whole new series of home equipment which will enable viewers to avoid ever having to see another commercial again. Networks which persist in airing commercials will be airing them to nobody — a fact which will cause advertisers to turn to other media.
The study also predicts that commercial revenues will likely be back up to levels last seen in 2001 by the year 2006. But, by that time, advertising dollars will be shifting away from the traditional TV commercial spot, says the Mercer study.
The study’s findings are pertinent in Germany, where a veritable broadcast explosion has taken place – similar to the one which happened in India a decade back.
Two decades ago, the average west German household received just three channels — all three of them fee-supported public broadcasters. East Germany had two state-operated TV channels and no commercials.
The public channels were restricted to 20 minutes of pre-primetime commercial advertising on weekdays. No advertising was permitted on Sundays or holidays.
But now the media revolution has ensured that the average German household has access to scores of channels, most of them commercial networks free to air advertising 24 hours a day, seven days a week. More than 20 national commercial networks alone at last count are available via rooftop antenna, cable and satellite dish throughout the land. This scenario has led to intense competition for every single dollar spent on advertising.
German national TV advertising revenues peaked in 2001 at US$18 billion, and have been edging downward every year since then, down US$3 billion so far. Mercer’s analysts say that, of the US$3 billion that have vanished from the TV advertising market in the past three years, two-thirds of that sum found its way into other advertising avenues. Only a billion was actually due to the economic downturn.
The Mercer study also says that a whopping 82 per cent of viewers look forward to the day when they can own a DVD recorder which will allow them to “skip over” commercial breaks at the press of a button. And 57 per cent would even be willing to subscribe to a service which would enable them to black out or skip over commercial blocks.
“Viewers want comfort, control and individualized programming,” says the study which warns, “and commercial networks will either meet those wishes or else they will go under.”
Are the Indian broadcasters listening?
Brands
Kwality Wall’s reports standalone losses following strategic HUL demerger
Ice cream major faces Rs 64 crore Ebitda loss amid commodity inflation and muted Q3 sales
MUMBAI: Kwality Wall’s (India) Limited (KWIL) has released its first set of financial results as a standalone entity, revealing a challenging start to its independent journey. Following its successful demerger from Hindustan Unilever Limited (HUL) on 1st December 2025 and its subsequent listing on 16th February 2026, the company is navigating a transition period marked by structural changes and high input costs.
For the quarter ended 31st December 2025, the company reported revenue of Rs 222 crores. Despite the revenue base, the bottom line was impacted by several factors, resulting in an Ebitda loss of Rs 64.2 crores. When calculated on a Pre-IND AS 116 basis, the Ebitda loss stood at Rs 83.8 crores.
Organic Sales Growth (OSG) declined by 6.5 per cent year-on-year during the quarter. Volume growth, however, saw a marginal increase of 1.2 per cent. The company reported a gross margin of 41.5 per cent. Additionally, exceptional expenses amounting to Rs 94 crores were recorded, primarily linked to non-recurring costs during the transition phase.
Performance across portfolios and channels was mixed. Within the impulse portfolio, brands such as Magnum and Cornetto recorded mid-single digit volume growth, indicating steady demand in on-the-go consumption. However, the in-home portfolio, which includes take-home packs, experienced muted consumption. The company is planning a relaunch of this category with improved offerings ahead of the 2026 season.
Quick commerce (Q-Com) continued to emerge as a strong growth driver, delivering robust double-digit growth during the quarter. Meanwhile, the company also expanded its physical distribution network by increasing the number of company-owned cabinets across markets.
Margin pressure during the quarter was driven by a combination of one-off factors and broader cost inflation. Gross margins were impacted by around 600 basis points due to trade investments made for stock liquidation. Additionally, cocoa price inflation contributed to another 400 basis points of pressure on margins.
Deputy managing director Chitrank Goel attributed the muted performance partly to prolonged monsoons and transitional challenges linked to the GST framework. Operating expenses also increased as the company invested in establishing its standalone supply chain, operational systems and corporate infrastructure following the demerger.
Looking ahead, the management remains focused on a volume-driven growth strategy. To restore profitability, the company has initiated a cost productivity programme aimed at reducing non-consumer-facing costs. It is also working on building regional manufacturing networks to optimise logistics expenses and improve operational efficiency.
The commodity outlook for the near term remains mixed. Dairy prices are expected to remain firm due to tight supply conditions and rising fodder costs. Sugar prices may also move higher following increases in the Minimum Selling Price (MSP). While cocoa prices have moderated recently, currency depreciation has offset some of the potential cost relief for the company.
