MUMBAI: It was a rare sight to witness at the bourse today when Vertoz Advertising became the first programmatic advertising company to be listed on National Stock Exchange this morning. The price for the public issue of 15.84 lakh equity shares was fixed at Rs 108 per share. Within the first 3 hours, the stock skyrocketed 21.6 per cent trading at Rs 129.6 after opening at Rs 116.
Founded in 2012, Vertoz has offices worldwide with its global headquarter in New York, USA. It offers engaging and innovative advertising and monetisation solutions to clients as a better option to the traditional methods of media buying and selling. The company’s technology, advanced capabilities and programmatic platform makes for a highly scalable software platform that powers and optimises the marketplace for real-time trading of digital advertising inventory between advertisers and publishers.
Indiantelevision.com got talking to the company’s founders and CEO Ashish Shah and founders and chairman Hiren Shah where they spoke about the company’s growth, division of funds raised from the IPO, programmatic advertising in India and much more. Excerpts:
Why did Vertoz take the IPO route when most agencies prefer private investments or acquisitions?
Ashish: We believe in doing different things rather than doing things differently. A lot of companies in our sector have gone through a private equity round and we did too had the same option but we chose to have an IPO as it helps in distributing the wealth in a better way. There are a lot of people in the company, investors, M&A, and all of that requires cash. Private equity wouldn’t have helped in solving that problem.
What was the revenue of the company last year and how much has it grown? What is your projection for next year?
Hiren: Our net revenue stood at Rs 20 crore in 2016 and at Rs 9 crore in Q1 2017. We are expecting revenue of Rs 30-40 crore in 2018. The way India is growing and with people moving to digital, we are expecting a huge growth in the segment.
Will you be looking at acquisitions going forward?
Hiren: Yes, but we will be looking at acquiring companies and not getting acquired. We have a subsidiary in the US and other European countries for acquiring digital businesses. We will be using the funds raised from this IPO to acquire those businesses.
When can we expect that to happen?
Hiren: Soon! It should happen in the second half of 2018.
When will you be listed on NSE completely?
Hiren: It is mandatory for small and medium-sized enterprises to be listed on NSE Emerge for at least two years or four annual general meetings. Once we are able to comply with that, we will be listed on NSE, maybe in late 2019 or early 2020.
How do you intend to use the funds raised for the IPO?
Hiren: We would be using around 70 per cent of the funds in inorganic growth and acquisition of businesses and the rest 30 per cent at a macro level on working capital of our business.
Do you think the Indian media industry has understood programmatic advertising and are leveraging it to the best use as opposed to other markets?
Hiren: It is a long way to go for India as people here are still not aware about programmatic advertising. They still follow traditional methods of advertising and it was the case with the US as well but they have evolved in programmatic to a greater extent. India on the other hand, still needs to understand the core of it but with prime minister’s Digital India movement, programmatic will see better days.
How do you think will programmatic advertising shape up Indian media over the next few years, say by 2020?
Ashish: India is a growing economy and is rapidly adopting various policies and changes for a future ready industry. We would be able to achieve what western countries have achieved in a quicker time.
How much do advertisers spend on programmatic now? How much is it in the west?
Hiren: Advertisers shell out less than 5 per cent of the advertising spends and a major chunk still goes into traditional media. In western countries, this number is close to 60 per cent.
When do you think will we be able to use programmatic advertising in radio?
Hiren: Although programmatic advertising is already happening in radio and television in other counties, it would start in India very soon, maybe by 2019. Some radio players are using programmatic in jingles but that is only limited to online radio.
How will programmatic adverting shape up in India going forward?
Ashish: programmatic is the need of hour and has huge potential in the ad world. Advertisers can take quick decisions on what they should do or change in their marketing communications. Although programmatic advertising will evolve in India, it will also change its form with various technologies coming in place.
In western countries, in-house teams are created for this. Is it a challenge for agencies to sustain?
Ashish: I don't see it as a challenge for agencies as it is just about economies of scale.Everybody has a room for everything.
