Crayons Advertising, India's first homegrown integrated advertising agency to go public, aims to double its revenue and achieve a 30% CAGR in the next three years.
Listed on June 2, 2023, the ad agency’s initial public offering (IPO) was oversubscribed by 147.61 times, leading to a subscription worth Rs 4,104.67 crore, as per the company.
Ashraye Lalani, Director, Growth and Technology, Crayons Advertising, said, “With the advent of Covid-19, our nation experienced a significant upheaval, and our industry, too, encountered its own set of difficulties. That was the time when we had the opportunity to rethink our business strategy so we drew up a road map for sustainable growth and came to identify an IPO to be key in raising funds to invigorate all our verticals and push the growth needle forward.”
“We are aiming to double our revenue in three years from now at a CAGR of about 30%,” he added.
Currently, the agency’s business from digital accounts for approximately 10% of its overall revenue. The company has been placing greater emphasis on augmenting the gross margins of its digital business over the past few years. “This focus has yielded significant progress, as the gross margin for digital stood at 7% two years ago and has now increased to an impressive 25%,” commented Lalani.
Crayons Advertising also aims to further strengthen its DOOH and events vertical, which will help them in margin expansion over a period of three years.
Lalani said, “For outdoor and events verticals, we are looking at establishing a very strong foot forward. In the last couple of years, we have been associated with certain events of great prestige, for example, Pariksha Pe Charcha. So, having an entry into that front is a large portfolio of outdoor sites.”
“With outdoor advertising, we are looking at enabling most of our sites with digital screens due to multiple reasons. It helps better targeting. Moreover, it will increase the volume of clients that we can house in one inventory. We also want to pair it with satellite-enabled cameras to track the footfalls or impressions that each site is tracking,” he added.
Furthermore, he went on to say, “We want to enable all our verticals with technology so that we truly deliver what we believe in which is an immersive distribution of communication. While digital will remain a key medium, given that it's the most enabled and evolving platform with technological advancements, we also want to leverage such similar advancements and bring life-like brand experiences to ambient settings while being able to measure their impact.”
Samir Datar, Chief Strategy Officer, Crayons Advertising, told BestMediaInfo.com that the agency has also shifted focus from clients offering lower retainer fees to the ones giving higher retainer fees.
Lalani believes that despite the rise of digital platforms, traditional media still holds substantial importance and Indian adex is only going to get stronger in the future.
He said, “According to the EY survey, the Indian advertising market achieved a significant milestone in 2022 by surpassing Rs 1 trillion in value. Traditional media contributed to 30% of this growth, while digital media accounted for the remaining 70%. Thus, it is evident that the advertising industry has experienced strong and continuous growth, which is expected to persist in the future.”
Datar stated that with the advent of the cookie less future, brands have realised that they need to go beyond traditional social media platforms and target consumers on digital platforms which have their own first-party data.
He said, “While people continue to engage with digital content, their consumption patterns have evolved from traditional approaches. While social media remains a vital medium, there are now numerous alternative platforms where individuals dedicate substantial amounts of their time.”
“Platforms like Amazon and YouTube have become search platforms. People are spending a lot of time on OTTs and Spotify as well. So, the interaction has gone beyond the traditional social media and our endeavour in whatever we do is going to be tapping into those platforms where people are moving,” he added.
He also emphasised that while in the last few years there has been a rise of specialised agencies, clients today are asking for integrated solutions, they do not want to deal with 10 different agencies for different things.
Furthermore, he went on to add, “We firmly believe that there is room for independent agencies that are making remarkable contributions. The Indian diaspora, whether residing in the Middle East, Europe, or North America, holds a significant position as one of the largest consumer segments in these nations.”
“This presents a favourable environment for an independent agency in these regions, as they can leverage our understanding of Indian culture, values, and beliefs. Such an advantage will greatly benefit these agencies. In return, Crayons Advertising stands to gain valuable insights and global practices that we can implement within India.”