Advertising giant WPP has snapped up a marketing firm whose co-founder had criticised its strategy as ‘not fit for purpose’.
Influencer Agency That Criticised WPP Sells Out To WPP
The FTSE 100 firm bought Goat, a social media-focused agency based in London’s Millbank Tower, for an undisclosed sum to merge with its influencer marketing arm INCA.
Influencer Agency That Criticised WPP Sells Out To WPP
The deal could be worth as much as £400million, handing founders Arron Shepherd, Nick Cooke and Harry Hugo a handsome payday.
Web celeb: Influencer marketing is when companies and brands partner with online personalities like Nicola Hughes (pictured working on a Goat campaign), to promote products
Influencer marketing is when companies and brands partner with popular online personalities to promote products to their audiences on sites such as Facebook, YouTube and Instagram.
WPP said the acquisition will create the sector’s ‘first truly global influencer marketing agency’ with chief executive Mark Read saying the area was ‘a key growth priority for the industry and for WPP’.
Goat co-founder and boss Shepherd said they ‘couldn’t be happier’ to be joining the ad giant.
The comments are a major shift from Shepherd’s previous attitude to WPP. He previously said the firm hadn’t ‘quite worked out digital yet’.
In an interview with The Influencer Marketing Lab podcast last March, Shepherd used the agency as an example of a group that was ‘not doing that well’.
‘The size of WPP, there might be 30 per cent to 40 per cent of their business that is literally not fit for purpose in the next three or four years,’ he added.
Shepherd also said at the time that Goat was considering a listing on the stock market and it hoped to become a similar entity to S4 Capital.
S4 is a marketing agency that was set up in 2016 by WPP’s ex-boss Martin Sorrell after he was ousted by the company amid misconduct allegations which he denies.
WPP shares rose 0.5 per cent, or 4.4p, to 953.6p after news of the deal.
Selling up: Goat founders (L-R) Arron Shepherd, Nick Cooke and Harry Hugo are in line for a handsome payday
While the takeover’s worth was not disclosed, a source close to the matter indicated Goat’s value was ‘not a million miles’ from past reported price tags.
These included reports from April last year that the firm was mulling a sale for a potential value of up to £400million.
Goat has worked with several major firms to sell products through online personalities.
It counts computer maker Dell, taxi app Uber and supermarket Tesco among its clients.
The company was founded in 2015 by Shepherd and his two partners Cooke and Hugo who, according to Goat’s website, met while working for a social media group in 2012.
It now has more than 150 staff across offices in London, New York and Singapore.
According to latest accounts filed with Companies House, the firm had a profit of £6.5million in 2021, more than triple the £1.8million reported the previous year.
The acquisition comes as WPP tries to shift away from traditional advertising models and towards new methods of reaching consumers amid the growing importance of social media and internet marketing.
WPP is also targeting the use of technology such as artificial intelligence (AI) in the industry, with Read saying last month AI was ‘fundamental’ to the future of the business.