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‘We’re the only option now’: Inside The Goat Agency’s bold plans following WPP sale


By Sam Anderson, Network Editor

July 18, 2023 | 10 min read

As the ink dries on the big-ticket deal, we sit down with the social media shop’s leaders to talk about their big play to dominate the influencer space.

Arron Shepherd and Dafydd Woodward of The Goat Agency

The Goat Agency's new leadership on their big play for the influencer marketing crown / Courtesy of Goat

Big network snaps up fast-growing indie; indie bosses get rich and duck out; indie slowly disappears into the belly of the behemoth. It’s a story marketers know well – and one that the leaders of The Goat Agency insist will not be re-enacted following the agency’s acquisition by ad industry titans WPP earlier this year.

It’s also what the former indie was wary of when The Drum last sat down with its founding trio and heard that, while all options were on the table, it was “looking to build a better version of S4 [Capital], rather than to be acquired by it”.

When The Drum now catches up with Goat in its new digs, GroupM’s central London base at Red Lion Square, global chief executive Arron Shepherd says he had “a much more accusatory approach” before he came in here, adding that his first few months Goliath-side have been “an education into what it’s really like.”

“As an outsider, you can think a load of things – some of them are true; some aren’t,” says Shepherd. “I assumed that maybe they weren’t caring so much about the work as it got bigger and bigger. But they do.”

Some change in attitude then, but no change in Goat, Shepherd insists – except rapid and major expansion. “We have a clear offering that isn’t going to change. We still run like an independent agency, just with that big brother adding additional benefits to people. The opportunities for our key leaders are huge.”

Speaking of key leaders, Shepherd’s co-founders stay on – Harry Hugo as global chief campaign officer and Nick Cooke as global chief client officer. Dafydd Woodward joins them at the top as global chief operating officer.

Woodward – who previously headed up Inca, GroupM’s influencer arm, which merged into Goat upon acquisition – insists it will be Goat changing GroupM, not the other way round, by bringing it “the kick in the arse that some of us need”.

The centralization play

Shepherd is giddy about the expanded opportunities available to him as the boss of a network agency. “The opportunities are pretty unprecedented,” he says.

“Access is a big thing. We’ve been a hot agency, but it was still very difficult to get global CMOs to have a conversation with me – basically impossible. Now it’s very easy. In the last month, I’ve spoken to 20 of them.”

Who, exactly? “If you look up WPP’s biggest clients, I’ll be speaking to their CMOs. The conversation will be a very direct one – it’ll be ‘you’re about to spend $300m to $400m and you’re set up in a very inefficient way to do this. You’re going to waste hundreds of millions.’”

This isn’t just bluster; Shepherd has a very clear vision of inefficiencies in influencerdom and how to clean them up.

“We’re about to go through a change in how brands deal with influencer marketing,” says Shepherd. “Centralization of influence will be the hot topic over the next few years. The rest of the market will click in 18 months or two years; the innovators will move this year.

“We’re in a similar phase to where programmatic was seven or eight years ago: everyone got really excited, they went and got a load of different partners in every market… But then suddenly, someone will realize, ‘We’re bidding against ourselves here.’ All the big brand holding companies have 40 to 50 different brands in the market, all run by different agencies, probably with different brand teams, all going after similar talent. They’re bidding against each other.” The effect, says Shepherd, is a seller’s market, with prices spiraling upwards. But centralization can prevent that: “The levels of efficiencies could be 75% to 80% of their ad spend.”

What that centralization means, says Shepherd, is: “We’re basically the only option right now. We’re the biggest influencer agency by a long way. And we’re the only one that sits within a global holding group. When it comes time to choose a centralization partner, we’ve put ourselves in a unique position. Those contracts will be hundreds of millions of dollars each.”

Woodward, meanwhile, sees a competitive advantage in truly merged media and creative. “We’re partly a media agency in our DNA – so we can deliver further efficiencies by using that content as our content. The number of brands we see taking 30-second creative and then asking, ‘Is this going to work on TikTok?‘ is ridiculous.”

Shepherd translates this into fighting talk: “We’re the only agency on the planet that can make influencer a media channel.”

This is the crux behind the sale. Shepherd says he took meetings with “everyone,” including financiers who told Goat to name its own price and investment bankers who told him he was “stupid“ for taking the deal. But it is WPP, he says, that can make good on the influence-as-media-channel promise and win those consolidated agency briefs to become “the next Ogilvy.”

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Measurement, models and AI: the new rules

A few things need to shift for Shepherd’s consolidated world to take effect. One is measuring performance. Being able to attribute results to specific creators or pieces of content is perhaps influencer marketing’s most dogged challenge. Another step-change in influencer marketing’s growth will be held back until it is solved, says Shepherd. “Old models are still deciding spend,” he says, based on linear channels, with the influencer channel’s increased efficiency still not being priced in.

Another brake on progress, says Shepherd, is the broader “set of rules on how we do influencer” based on “the rules of how you make a TV ad.” Shepherd has particular disrespect for the traditional agency ‘cost-plus-time’ model: “I don’t think you get the best out of your spend… t might be the right model for programmatic, but it certainly isn’t for influencer and social, where creative and media is pushed together.” Instead, the Goat crew are advocating strongly within WPP for their ‘guaranteed results’ model.

These shifts will help the space grow up and make more money. Shepherd says: “Maturity won’t be achieved until it’s a big enough spend that brands take it seriously… but maturity is also understanding that not all influencers work – and choosing based on data.”

The latter point is one of Shepherd’s bugbears. Only 20% of influencers work, he says. And that’s not the most popular 20%. At any price- or follower-point, 80% simply do not get results with commercial work. Working out why is the million-dollar question for Goat – but the pair say they have an answer for that too: an AI augmentation of Goat’s talent platform, Ibex. Letting AI loose on the full data sets of Goat’s campaign work, they hope, may take that 80% inefficiency down to 40%. This is AI not as a content play or on a client platform but to help the agency “buy as efficiently as possible from the global influencer community.”

As they work to pull the industry toward this centralized, attributable, efficient vision, the pair’s targets are not small. “Our ambition is so much bigger than it ever was,” says Shepherd. “We’ll be 3,000 to 5,000 people within three years and doing multiple billions a year. We’ve just scratched the surface; we’re having conversations as big as our revenue.”

“I don’t think I’ve knocked on anyone’s door,” says Woodward. “These conversations are coming to us. That’s a great place to be.”

Agencies Agency Leadership WPP

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