MAM
Investment vs returns: What ad agencies should know during Covid2019
Advertising and marketing agencies have witnessed a different horizon during the Covid2019 pandemic, especially the ones serving digitally. Several brands have diverted their marketing spends towards digital mediums, while several others still believe in traditional advertising as the sole solution. Regardless of what experts and marketers think, the growth of advertising has been consistent, and with the markets becoming increasingly competitive, the ad world is surely going to grow unstoppably.
An ad agency largely invests in the following formats, and let’s see how they can anticipate returns in all of these domains:
● Advertising spends for clients
Several ad agencies invest in the advertising spends of their clients and get paid for it in return, on a frequent interval. Some agencies, in this process, also charge an ad management fee which is usually a percentage of the total advertising budget finalised upon mutual agreement. Due to the skyrocketing digital traffic during Covid2019 times, the average cost of advertising for sales/impressions decreased significantly which eventually led to a better return of investment for both the agency and the brand.
● Good content creation
We have heard numerous times that ‘content is the king,’ and true to its meaning, creating the right kind of content is really important for agencies and brands alike. Once you invest rightly into creating relevant and impactful content, it is sure to give you returns which go way beyond just sales conversion.
There are several success stories of how an impactful content has created the right kind of brand recall and visibility for several advertisers across the globe.
● Efficient teams
Covid2019 brought in difficult times for businesses across the globe. With the buying cycle at a halt, cash flow decreased and it became increasingly difficult to pay the salaries and remuneration. In such a scenario, agencies that have continued to invest in their efficient teams will flourish in the longer run.
Such an effort not only adds up more credibility but also develops a sense of trust for the agency among the team members. Investing in the right team is a must and returns are sure to come.
● Client relationships
Due to the economic slowdown, some brands had to stop agency services and keep the work on hold for a certain period of time which varied from a month to may be a few months. While one of the perspectives says that you should avoid working when not being paid for it, on the other hand, in such a scenario, several agencies choose to stand by their clients and support them in times of crisis. This strengthens their bond with their clients and helps in developing a connection for a lifetime. Such investments in building client relationships always pay off in the longer run.
(The writer is co-founder and CEO of Gemius. The views expressed are her own and Indiantelevision.com may not subscribe to them)
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.
