Modern Marketing Ad Spend Brand Strategy

With $100m revenues in its sights, how did The Goat Agency get so big?

By Michael Nutley | Writer for The Drum

August 11, 2022 | 6 min read

A test-and-learn approach to influencer marketing and a unique model that uses an unprecedented volume of campaign data to guarantee results for a fixed price – as The Goat Agency is on a fast track to $100m in revenues, we explore the agency’s meteoric rise to become much bigger than anyone realized and why the founding trio say they have still only scratched the surface of the opportunity in this space.

The Goat Agency Co founders

The Goat Agency co-founders Arron Shepard, Nick Cooke and Harry Hugo

“Social media is where consumers spend most of their time, so it’s where brands should spend most of their money.”

That simple equation is the way Arron Shepherd, co-founder of leading global influencer marketing agency The Goat Agency, explains both the business’s dramatic growth, and its potential.

Certainly people’s use of social media continues to increase, accelerated by the recent lockdowns. According to a recent report from Datareportal, the number of social media users worldwide increased by 13.2% between January 2020 and January 2021, nearly double the rate of growth in the previous year (7.8%). User numbers grew another 10% to January 2022, to a total of 4,623m. And people are spending more time on social media; the worldwide average is now two hours and 27 minutes a day, up two minutes over the January 2021 figure.

Unsurprisingly, the global influencer market is also growing, from $13.8bn in 2021 to an expected $16.4bn this year and $20bn in 2023.

“Ad spend across the board has dropped, but the influencer market – and social more broadly – is the anomaly,” Shepherd says. “As we’ve all been glued to our phones and social feeds, the industry has seen budgets shifting at an ever-greater rate towards social from traditional ad channels – a trend that was already very much evident pre-pandemic.”

Even so, Goat has massively outgrown the market, seeing revenues jump from $20m in 2019 to $57m in 2021 and they are expecting significant growth once again in 2022. Shepherd puts this down to two main factors: the agency’s unique business model, and its rapid international expansion.

Treating influencer marketing as media, not PR

Shepherd and his co-founders – Nick Cooke and Harry Hugo – met at Sportlobster, a fan engagement app co-founded by Shepherd. Dissatisfaction with the agencies they met, and an early realization of the power of micro-influencers, led them to launch Goat in 2015.

The three co-founder’s starting points were that influencer marketing should be treated as media, rather than PR, and that it’s a performance channel. What turned these insights into a business model were a rigorous test-and-learn approach, and the vast amount of data this approach yielded.

“We made the early decision to position influencer marketing as a scalable media channel, rather than act as a talent management company or a software offering,” Shepherd explains. “We developed a proprietary CRM system which houses performance data from the influencers we’ve used and ranks them.”

“80% of influencers don’t work, but the ones that do work, work better than every other channel,” he continues. “We don’t just guess, we know who can sell a $10 make-up brush versus a $50 make-up brush. You can only get that data by using the influencers in a trial-and-error way and seeing who converts. The advantage we have over everyone else, not just in our industry but in the ad industry, is that, when it comes to the most powerful advertising technique – which is using influencers in the right way – we understand who will actually work, and we can make an unbiased selection, because we don’t manage any talent. That means we can guarantee results for a fixed price.”

This offer has attracted such big-name clients as Dell, Unilever, Tesco and Biersdorf, as well as many fast-growing DTC companies.

Turning remote working into a global presence

Goat started off in London, expanding to open offices in New York in 2018 and Singapore in 2019. Then the pandemic created the opportunity for another big shift. With staff forced by lockdowns to work remotely, the co-founders realized they had the chance to add another point of differentiation between themselves and their competitors. The agency now has more than 200 employees living and working across more than 15 different territories, increasing its understanding of influencer marketing around the world.

On top of this, the agency has expanded its offering to full-service social media marketing, including social strategy, paid media, production and social media management.

What next for Goat?

2021 was a milestone year for Goat. It thrived in the challenging conditions of the pandemic, more than doubling its revenue, adding 75 staff, and bringing a raft of new clients on board including Tesco, Dell, Mattel and Headspace. But where most heads of a seven-year-old, $100m-revenue agency might be looking for an exit via trade sale, the three co-founders of Goat are looking elsewhere.

“We want to change how people do things, and not just be a flash in the pan as we get swallowed up by someone bigger,” Shepherd says. “We’ve still only scratched the surface of the opportunity.”

Modern Marketing Ad Spend Brand Strategy

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We’re the leading global social media marketing agency powered by influencers. We pride ourselves in bringing together data-led performance, real human relationships, expert creative strategy, authentic, engaging content and laser-sharp paid media targeting.

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