Wired's article goes into the history of Klout and how it came about (Joe and his three-month speaking diaengagement), Kred's own story is borne out of their tool for social media analytics and monitoring and PeerIndex was borne out of an initial desire to find the best topic curator using crowdsourcing to provide the most interesting content being published at the time.
But the real question is: what are these companies doing? What is the big deal about "influence marketing"? Why do I get a score of 47 at Peerindex, 54 at Klout and 721(!!!) at Kred?
What We Measure is One Thing, What Our Clients Want Can Be Another
One of my favorite discussions in the past 15 months often consists of either an agency marketing person, or a brand director or other publication entrepreneurs working to understand what can "influence marketing" do for them? In a previous post, I describe what I believe to be the rebranding of word-of-mouth marketing to influence marketing. The difference is that in the new era of social networks, APIs for "exhaust data" and Big Data systems to process all of this data into actionable information brings about a new belief that we can "measure" word-of-mouth. I would argue, like Nathan Gilliat did, that there is no such thing as a "unit of influence". All of us - Klout, PeerIndex and Kred - are building models that become our own "truth" for determining actions.
And yes, these are models - not specifically measurement on influence if that was possible. We use models to extrapolate what is happening - and all models have biases that are built around hypotheses. As Nathan says:
Models reflect the opinion of the modeler and the objectives they support. Because apparently simple concepts might be used for different purposes by different specialists, we end up with diverse models using the same labels. In essence, we talk about the labels, because they represent familiar ideas (influence, et al), but the models represent what we really care about (such as positive word of mouth, leads, and sales).
If you understand that the label is just a convenient shorthand for a model that takes too many words to describe in conversation, it's not a problem. If the model generates useful information, it's doing its job. Just don't assume that any one usage of the label is the correct usage. Modeling requires judgment, interpretation, and prioritization in context, which are incompatible with standardization.
So, if you understand that the models are our shorthand for creating meaning out of measurement, the real question is, what are our clients looking for? And to be clear, by clients usually mean the ones who pay for our services.
Agencies and Brands are suffering. They are awash in data and dashboards and monitoring and listening and so on - trying to get a grip on this world we call social media marketing. Years ago, when I spoke on politics and social media , the ideas of "social media" was scoffed at. Today, it will be the "biggest" area of growth in all businesses. Shades of the Cluetrain Manifesto, anyone?
So, when the clients are asking for help, what are they doing? The same thing they have been asking for years on end - how do I get the message out to the right people to move the needle on my goal? The problem is - what do you need to measure to be able to determine return-on-investment (ROI)? And that is where the problem and the puzzle exists.
Now, when people pay for advertising, they are paying for the three things mentioned in this subtitle - impressions, clicks (e.g., coming into the store, clicking on the advert, etc) and acquisitions (e.g., purchases, email addresses submitted, signups, etc).
So the question is - how does my marketing spend affect any of these metrics? And if I increase these metrics, will I improve my bottom line? Can I spend more to get the "right" customers? Can I spend less to get lots of potential customers and benefit from transactions and percentages (e.g., if I get millions of people coming and only 2% purchase, that's GREAT!)? Or could it be an optimization of spend where we reach the "right" people at the "right" time while ensuring that we manage our spend and do not annoy our potential customers?
Well, we are all aware of the joy of display and banner adverts (e.g., billboards, signage, TV ads, banner ads, etc) and sponsorships (e.g., branding along side events, sections of a site, etc). And, with the advent of google and other players in this space, the ability to provide relevant adverts alongside the intent action (e.g., search engine adverts). But social media is more along the celebrity advertising model - where someone vouches for some "thing" and their friends/followers/fans see/know/respect the insights that the individual has.
Technology Making Microcelebrity Outreach Possible
When a celebrity spoke, the public listened and took note.
This was not new even back then - heck, I argue that the best marketing campaign ever created was the birth and expansion of Christianity and all of the great visual billboards found throughout the world in churches and other places of worship. Christ provided a brilliant point of focus for the messages that are part of Christianity's teachings.
Today, we have an incredibly fragmented marketing environment where messages are coming from all directions - and, as human beings, we have to filter them via various methods. We listen to certain radio stations, watch certain TV news programs, read specific newspapers/magazines and most likely, spend a majority of our time in and with the same people. This natural alignment with groups is a way we handle the barrage of information that we are given on a regular day/week/month. We rely on the information gatekeepers that exist in these communities to either be up on specific topics or manage the entry of them. And as individuals in the community demonstrate knowledge within specific topics, our default behaviour is to assume that they have the "authority" on those topics/issues (since no one else stands higher in our personal community). We assume (mostly) that these individuals have a bigger set of reading and information consumption than we do, which is one of the reasons why we tend to listen. As the advice turns out to be correct, their authority and utility becomes higher and higher.
What does this have to do with Influence Marketing? When we look at the success of companies that have built strong networks like Groupon, DailyCandy, GiltGroup - these lists have been the targeted channels that provide guidance on purchases on specific products/services. The medium of communication is email and the user behaviour has been the consumption of email on a semi-regular basis.
Today, the same information consumers are using more than simple emails. They are on twitter, on Facebook, reading their many RSS feeds off of google Reader, watching content they have subscribed to on YouTube (altered to the existence of the content either via email, text, tweet, share post, g+, etc). They are consuming during their in-between times and then choosing if they want to share the content - either for their own remembrances (e.g., bookmarking), for their personal view of who they are (e.g., want to be strong in a specific area of knowledge), or for their view of what their friends may/might be wanting to see. Just like the celebrity, the public acts of individuals within their community become more and more important since much of what happens when engaging with social media content becomes part of the reading material of the people that are connected either through social networks or even search tools (e.g., Google's social search).
So now, how does influence marketing come into play? Much the same way as celebrities do - with their connections being formed as "agents" and other gatekeepers. Right now, you are likely to be perceived by your friends and family as being knowledgeable about a number of topics/areas of interest. If a provider of a product/service of a solution that piqued your interest was able to reach you and show you their solution with your blessing, would you take it?
And then, when you did take it, you could potentially be an evangelist for the product/service when and if others needed it - since you would be reinforcing your own behaviour because others expected it of you.
Through email, tweets, Facebook/google+ posts and other means of sending content, we are creating that extremely fast communication system that allows for people who want to be knowledgeable to become knowledgable.
I remember when I got my first PalmPilot and the number of times I showed off my new find to all of my friends. Within weeks, I had at least twenty people making the purchase of a PalmPilot because they found my passion and love for the product so compelling. And when they played with it, they threw away their folios and became full-fledged PalmPilot users. Now, was I an influencer? I certainly did not get paid for my endorsement - or did I? The fact that my friends listened rapturously (okay, I jest) to me extolling the virtues of the PalmPilot and the fact that they decided to purchase only cemented my role as a technology "truffle hound" for my friends. After that, many of my friends, family and friends-of-friends would ask me about tech - long after I stopped promoting Palm.
That enthusiasm for evangelism and the power of my skill is a mark of influence - but how would we measure it? And how could companies take advantage of my willingness to listen and willingness to share my discovery / finds with others.
Now we are at the crux of the problem.
Perks are Currency and Discovery that Truffle Hounds Want
From my experiences, both PeerIndex and Klout are offering people a chance to "benefit" from their interests and their perceived skills in spreading messages digitally. It is not about being the brightest in a particular area of expertise; it is about being the person who knows how to package it up and create a spread that works for others to consume. People like Tim O'Reilly (@timoreilly) have already built up a following through other means like any other celebrity - which means he is likely to be quite influential on specific topics. Additionally, he could place a silly link out to the world and have all sorts of people see it (read: impressions), click on it and then potentially be acquired (e.g., sign up, purchase, play, view).
But what about me? My followers list is only 2500+ large, often made up of people trying to get me to follow them. My following list is closer to 1000, if only for the fact that I have a diverse set of interests and I know far too many people (personal note: I have a contact book of 8000+ people I know over the past ten years). Why would anyone reach out to me - and how would they reach out to me?
Well - using twitter (@ messages), emails, referrals (e.g., LinkedIn) or sponsorship/adverts on media I read could reach me. Or, I could discover my profile being on some service like Klout or PeerIndex or Kred, see what they think about me, and then want to correct it (or delete it darn you bad people!). Now, I have been captured by the flypaper of egosurfing.
And when I have been indexed and computed, now these player can reach me for the areas that I may have signaled to them that I am 1) interested in and 2) willing to engage in a brand discussion. We used to think of this as the PR role - reaching out to newspaper editors and reporters, then we migrated to bloggers and blog editors as google began to provide us with a version of ranking by the PageRank of sites. And now, we have the microdata that we perform accessible to ourselves and others for evaluation of how effective we are at getting people to read our content, how effective we are in engaging in discussion, how effective we are in getting people to click on a link.
These metrics that are borne out of the models are what we use to come up with the ranking and the formulas for the Perks campaigns - working to convince individuals that they are worth the connection to a brand and by connecting to the brand, they are able to make their own mind up about evangelizing a brand's product or service.
Thought of in that way, take a read of the Klout Code of Ethics for Influencers:
Influencer Code of Ethics
The idea is that your authenticity is what matters in the engagement, not just the size of your network. It is the ability for you to chose on your own response (though social convention suggests that you will respond with even a simply thank you). By making the connection between brands/agencies and the potential microcelebrities whether in a general sense, a geographic sense, a topical sense or a combination of the attributes, we are empowered to learn more, not less; and we are able to engage in the conversations that we were promised with the Cluetrain Manifesto.
Borrowing from a political candidate from 2004, "You have the power!".
Yes, you do - and if you chose to exercise the power, these tools (e.g., PeerIndex, Klout and Kred) can give you access to that power.