by Herman Manson (@marklives) Digital agency Interface Digital and its parent, digital marketing performance group incuBeta, are competing globally using a substantial local skills base. The executive team is building an international business and expects the group to grow quickly over the next five years, possibly laying the groundwork for another merger (incuBeta merged with DQ&A Media Group a year ago in what was billed as a R1.5bn deal) to achieve ever-greater scale and reach.
Interface Digital has been around nearly as long as the commercial internet in South Africa. The company, founded by Alan Lipschitz, first an launched online directory, EasyInfo, whose ubiquitous disks — and later CDs — cluttered many a magazine in 1995 before the business expanded to include a free webmail service, webmail.co.za.
Highs and lows
In those wild days of the internet, EasyInfo was no stranger to controversy, including a showdown with Telkom which saw one of its directories closed down; as Interface MD, Dennis Armstrong, puts it, there have been highs and lows but, overall, the business has a good news story to tell as its reach extends into international markets using a South African skills base.
Because of its early products, Interface was essentially a sales business sitting in the tech space. It sold ad space on its directory and also on its webmail service, which at one stage had over a million active users (the number sits closer to 600 000 today, according to Armstrong). The company had two sales teams in the market but faced numerous challenges: on the webmail front, Gmail was starting its global rise and, on the directory side, the business struggled with a meagre 7% retention rate.
The solution was to work with Google by offering directory data to the search giant. Interface became a Google Adwords reseller and quickly established itself as one of the largest Google resellers in SA. Today, it is a Google Premier SMB (small business) Partner, serving between four and five thousand active customers internationally. From selling Adwords it introduced additional services to become a fully fledged digital agency, offering development and design, catalogue and content management systems as well as mobile and online advertising solutions.
Sister companies
In 2011, Interface was bought by incuBeta Holdings in a deal ITWeb estimated to be worth R100m. As such, it sits next to sister companies Clicks2Customers, NetMediaPlanet (based in the UK), ClickEgo, Evly and Wobble. Lipschitz serves as CEO of incuBeta Group. Armstrong also serves as the MD of Net Media Planet South Africa (NMP SA) and is a group executive at incuBeta.
Today, the agency undertakes digital, direct and social media projects for a number of large ad agencies while they build these competencies inhouse (offering a white-label digital service to ad agencies, in effect). According to Armstrong, Interface has a five-year window on each agency project but it’s helped the business grow and expand its own skill set — it also continues to offer premium services to agencies that graduate to their own digital offerings.
Looking ahead, Interface is preparing for more-direct client relationships, especially in the industrial space. Engineering and construction firms are not being properly represented by agencies, says Armstrong. Interface intends offering these firms a full-service offering and aims to sign 40–50 such clients in the future.
Expansion plans
Interface is also building its social media business and growing its offering in paid search, SEO and analytics. It’s expanding alongside the incuBeta Group into new markets; currently, it does business across three time zones, is directly active in 18 markets and works with resellers in another 28 territories. incuBeta employs 450 people and, while most of its staff is based in SA, only about 20% of its revenue is generated here. At group level, the business hopes to list internationally (possibly in either the UK or Netherlands) in the near future while keeping its talent base in SA.
The agency is also getting into product development and hopes to be first to market with a number of new products and services. The rapid growth of digital budgets means there continues to be much growth in this segment, and Armstrong believes the agency will build partnerships with clients in future which will allow the use of client data plugged into ad technology to talk more efficiently to consumers across multiple devices.
Herman Manson (@marklives) is the founder and editor of MarkLives.com. He was the founding editor of media.toolbox (1998–2006) and Mobile.Works, and the co-founder of Brand magazine. He has served on the editorial boards of The Journal for Convergence, as well as of Fast Company South Africa. Winner of the 2011 Vodacom Social Media Journalist of the Year award, he was also a finalist twice in the Highway Africa Award for the Innovative Use of New Media in Africa (2003 and 2004). Over his 20-year-plus career, Herman has contributed to numerous journals and websites in South Africa and abroad, including the Mail & Guardian, .net, Intelligence, AdVantage, Men’s Health, Computer World and African Communications. He has consulted on web architecture to several financial institutions.
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