In sport and gaming, a ‘goat’ is the Greatest Of All Time in a given discipline – the term seems to date back to Muhammad Ali. It’s no surprise, then, to find real ambition among the three Brits who in 2015 named their fledgling social media advertising shop The Goat Agency. We sat down with them to talk about managing a 200-person agency as a triumvirate, the origins of influencer marketing, and building “the next generation of holding group.”
Depending on how you look at it, The Goat Agency either has no chief executive officer (CEO), or it has three – co-founders Arron Shepherd, Harry Hugo and Nick Cooke. The three have been equal-equity partners since day one (but have taken investment, including a private equity raise from Inflexion in 2021).
So, who’s in charge?
“We’re all CEO, if it’s within our area of the business,” says Shepherd. “We’re three equal founders. There isn’t a CEO. It depends what conversation you’re having with us as to which one of us you’d speak to and which one would have the authority to act.” So, no three-letter job titles, but a clear division of labor: Hugo handles campaigns; Cooke looks after clients; and Shepherd takes big picture stuff including investment and positioning.
On creating a Goat
The three worked together before launching Goat in 2015 – at Sportlobster, a fan engagement app co-founded by Shepherd. Cooke worked for Shepherd; Hugo worked for Cooke.
In Goat’s lore, there were two sparks at Sportlobster that ignited the Goat flame. The first was disappointment with the agencies they contracted to help grow the app. “Agencies were promising numbers and not delivering them. As an industry, that was an accepted factor,” says Shepherd. “Someone would come in and say, ‘we’ll give you 100,’ but they’d give you 75 and look at you like, ‘we did a good job, it was OK.’ I just never understood that ... we started doing things ourselves just because we were getting let down.”
Their most successful partnership at the time was with footballer Cristiano Ronaldo, who would post about the app to his 110 million Facebook followers (these were the days of Facebook fan pages’ hegemony). The posts generated, they say, 1,800 downloads each.
Hugo’s idea was to replace this costly, scattergun approach with something like what’s become known as micro-influencing. They asked an amateur football commentator with 100,000 followers on Twitter if he’d post about the app. Hugo says: “There was no price guide. There was no industry. We were the first people to offer to pay him, so he went, ‘yeah alright, I’ll do it for a tenner.’”
The post resulted in 2,000 downloads. This is the second spark: as Cooke says, “they didn’t know they were influencers, they were making a quick buck. There was a big opportunity there and other agencies weren’t doing it.”
Quickly, the trio says, they discovered that not every influencer with a similar following and engagement levels could drive those results – only about 20% could.
Now that the influencer game is established, The Goat Agency’s core business is about being able to tell which 20%. As Shepherd says, “80% of influencers don’t work, but the ones that do work better than every other channel.”
By now, they say, they’ve used 250,000 influencers globally. Shepherd says: “We don’t just guess, we know who can sell a $10 make-up brush v a $50 make-up brush ... You can only get that data by actually 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.”
When they use an influencer, performance data goes into a CRM that ranks them. They use that data to guarantee results for clients. That guarantee is “on payments ... if we hit 90%, it’ll be 90% payment – but it won’t happen because we’ll just keep spending and our margin will flex because of it,” says Shepherd. Other agencies, he says, are “not really incentivized to make things better. [They’re] just incentivized to spend the client’s money.”
The new generation
Speaking of clients’ money, the trio intend on earning more of it. Shepherd says clients with an ad spend of £100m who currently spend 1% of that on social will increase to 20% or 30% soon. “We’ve still just scratched the surface of the opportunity. Social is where consumers spend most of their time, so it’s where brands should spend most of their money.”
Their faith in social’s rise as the “most powerful” advertising technique is clear. An IPO and M&A moves are possible, they say, but exit through acquisition sounds unlikely (for now). “We look at the ad world right now and the traditional holding groups are in a really difficult place. There’s a huge amount of opportunity for people creating the next generation of holding group,” says Shepherd.
Shepherd has praise for that new generation, but insists “we’re on the front foot. We’re looking to build a better version of S4 [Capital], rather than to be acquired by them ... We want to actually change how people do these things – and not just to be a flash in the pan as we get swallowed up by someone bigger.”
It’s perhaps too early to think about legacy, but it’s already on the trio’s minds. Shepherd namechecks Mark McCormack, the legendary founder of sports management company IMG. “Now, if you look at the people running most of the sports organizations in the world, they’re people that started at IMG ... If, in 10 years’ time, all these other agencies and fast-growing brands are run by people who started at Goat, that would bring the three of us enormous pride.”