By End Of FY23 Digital Should Account For 30% Of Our Total Revenue, Says Kunal Lalani Of Crayon Advertising
The COVID-19 pandemic has brought a significant impact on the advertising industry, compelling companies to adapt to the digital space. In a conversation with BrandWagon Online, Kunal Lalani, managing director, Crayon Advertising talked about how the integrated agency is leveraging from this shift towards digital and the growth is expected in the coming years. The home-grown advertising agency is all set to go public as it has filed for initial public offering (IPO). (Edited Excerpts)
By End Of FY23 Digital Should Account For 30% Of Our Total Revenue, Says Kunal Lalani Of Crayon Advertising
One of the first advertising agencies to go for an IPO, why now and not earlier? Crayon Advertising has been there for a long time.
By End Of FY23 Digital Should Account For 30% Of Our Total Revenue, Says Kunal Lalani Of Crayon Advertising
Prior to COVID, life was all looking normal. Probably we were running it more like a family owned business, but there comes a time, and COVID was that time when everything came to a halt. Normally when you’re running businesses, you don’t get time to really sit down, pause, and give it a thought. Not to mention business also dwindled completely, everything just went crashing.
By End Of FY23 Digital Should Account For 30% Of Our Total Revenue, Says Kunal Lalani Of Crayon Advertising
While on our way up post the COVID times, we realised that we need to now move into a larger scale, and professionalise it in terms of expanding the business, and therefore, it is important that we become more accountable. So going for an IPO is the right thing to do.
By End Of FY23 Digital Should Account For 30% Of Our Total Revenue, Says Kunal Lalani Of Crayon Advertising
What is the broader strategy behind going for an IPO?
Obviously, growth is the biggest factor. And we feel the whole business, the industry is changing very rapidly. And digital, as I would say, digitally led, all the aspects of advertiser communication are moving into the digitally led platforms. Therefore, there’s a lot of need for a lot of technology, and a lot more enhancement of skills, including people and resources and all that.
Post COVID, how has the digital space been? Is it safe to say that the digital advertising space has seen a robust growth?
Absolutely. So COVID compelled people to get onto the digital mode, because of the amount of restriction which came in the country, not only in the country but in the world.
So even people who were not using digital payments started using UPI. We’ve all seen that the transformation, similarly, in business and all other aspects, the digital journey actually became serious, and it touched each and every aspect of our life. When that happens, automatically, the movement of communication also has to shift in the same direction. Digital existed even before COVID but it was a slow process with slow progress but the pandemic completely changed the speed.
What part of your current revenue comes from digital?
This financial year, until September 30, 2022, digital accounted for 24% of our revenue. By the end of the financial year, it should be just around 30%.
What is the kind of growth you expect to see in the coming three-four years?
We are quite confident that in three years we will be able to double our revenue. So I would think we should be able to reach 45% revenue from digital by 2026.
IPO means maintaining profitability, given how volatile the advertising industry is, how do you plan to achieve that and maintain consistency? And has shrinking advertising budgets from brands affected your business?
So besides the COVID period, I believe the industry has been pretty stable. However, there have been instances wherein, in a particular period of time, advertising mediums have suffered individually. For example, print advertisements went down during the pandemic but at the same time, digital surged.
The overall advertising pie never shrunk. So advertising has never shrunken all these years barring the COVID period. We’ve not had a difficult time in the last 15-20 years in advertising.
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