The Power of Klout

An Emerging Communication Tool

The power of influence has always been a valuable commodity, but this factor is especially important for today’s marketers. The social interactions between consumers are evolving with the rapid growth of digital technology and the opportunities for influence are becoming more widespread. Opinion leaders are dominating the social sphere. But how do we measure the true power of this type of influence?

Today, online influence can be described as the ability to drive others into action, whether it is to share a picture which generates online feedback or tweeting
about a restaurant to inspire followers to try it for themselves. Klout is an emerging communications tool with the capability to analyze one’s social presence on multiple social platforms, returning a single number (between 1 and 100) which represents their total social influence. This offers marketers an opportunity to identify users
who have the potential to create meaningful conversations around their
products. Profitable relationships can be built by getting samples into the
hands of these consumers and allowing the power of social influence to increase
awareness and willingness to purchase among followers.



Background

Klout is a San-Francisco based start-up company focusing on social media analytics.
The organization was launched in September 2009 and currently employs 40
people. So much data has been captured from sites such as Facebook, Twitter, LinkedIn, Google+, and others. This field of social media analytics has emerged to leverage the mountains of information that is now available in order to help develop meaningful market insights. The company has built an algorithm that is capable of analyzing an individual’s network, the content they generate, and how others interact with the content to provide a score between 1 and 100. The higher a user’s score, the more influential they are in the digital space. Since its inception, Klout has evaluated more than 100 million profiles of individuals whether they realize it or not. The actual user base is estimated to be 2-3 million people. This user base includes all of the participants who engage with the platform regularly and monitor their social activity through the dashboard summary. Klout measures influence with inputs such as following count, tweets, follower count, comments, likes, shares, list memberships and how influential one’s connections are.



External Trends and Market Factors

Having a high-impact brand is more important than ever in today’s global marketplace. There is an overwhelming level of information competing for the attention of consumers so exploring new channels for communications can create opportunities to break through the clutter and inspire purchase decisions. This type of platform can give companies a head start in the race to create relevance. Social
media already forms a strong pillar within the strategic marketing plans of
organizations to target and connect with buyers, but it is also having an
important impact on a company’s share of search engine space. Google has
signalled that its search results reward businesses that make an ongoing commitment to producing and sharing quality content. Klout users with strong influencing capabilities could improve a brand’s odds of standing out in the right places - when consumers are researching alternatives to meet their needs.



Despite the explosion of social media, marketers are expected to support their digital strategy with more traditional forms of communications to further reach prospects that have engaged with a brand online in a super-targeted manner (Caligiuri, 2012). The key is to augment the frequency and effect of a message by adding traditional methods to the mix and focusing in on targeted clients, not the market at large (ibid). Content has been essential for a long time but the context surrounding how it should be presented is increasingly important. Highly targeted communications are now expected by consumers who demand tailored communications that talk to their problems (ibid).


A next step beyond shaping appropriate context around branded content is to
call individuals to action. Interesting content is a start but it now needs to go further to get prospects into the “marketing funnel” (ibid). To some degree, marketing communications should now be presented to consumers with the expectation
that they will evolve based on consumer input. We have seen rapid growth of
user-generated content and Klout has the potential to serve as a bridge to connect content to action. Feedback and input from consumers can then be used to improve the targeting power of future campaigns. Empowering opinion leaders to help shape the message of a business would be a great way to build flexibility into communications strategies.




Investing in Klout

Underlying Klout’s social media analytics service is a business model that aims to assist companies in boosting their awareness or looking to test new products in-market. Klout Perks are offered to motivate the user base and create a lucrative opportunity for businesses to reach out directly to their most influential
consumers. Users are able to earn exclusive products, services, or experiences
based on the scope of their influence and then they are encouraged to share thoughts with their audiences. Businesses can scan through the Klout user base to find the perfect targets capable of passing on their message in a powerful way. They can look for consumers with high Klout scores or those who are passionate about the product category. The appeal for marketers is that there is a high likelihood that these types of consumers will generate authentic conversations around their brands, with the right types of people, at a lower cost than mass communications. Companies now have the opportunity to access a narrow market segment by restricting perks to those who have the greatest potential to influence their targets. The ultimate goal becomes greater awareness and engagement between brands and their target consumers. As of November 2011, there were more than 50 partnership agreements between Klout and companies such as Spotify, P&G, General Motors, Nike, Microsoft, and Disney. Today there are more than 2,000 companies who use the data compiled by Klout as part of their IMC strategy.




Communication Objectives

Synergies

Klout is appealing on many different levels but the factor that is most important for success is cross platform connectivity. To ensure the accurate and legitimate depiction of one’s social influence, the algorithm must collect data from many sources and determine the core topics of conversations that the user is having online. Affiliation with social networking powerhouse sites improves the
legitimacy of the influence assessment service that is provided to users. Further investigation would be required to determine the influence that Klout users have offline and in exploring the relationship that exists between online communication through opinion leaders and more traditional channels. A digital marketing message needs to be reinforced elsewhere to standout, resonate with consumers, and motivate them to take action. However, Klout does present a simple, low-risk opportunity for brands to build their presence and connect with consumers through a single application.



Barriers and Threats to Adoption

Before any marketer can enter into a business relationship with Klout to complement their communications strategy, it is important to consider the factors that may prevent this tool from gaining widespread adoption. Placing the product directly into the hands of a consumer does not necessarily mean that the user will have a positive experience and share it with their network. An influencer discloser card that comes with each perk indicates, “I was given a free product or sample because I am a Klout influencer. I am under no obligation to use the sample or talk about this company.” Carefully selecting the right influencers for free trials is
important to ensure the conversation will not end with shipment of the samples.

The validity of the service has also been questioned by industry insiders. Klout claims that it accounts for over 400 variables across a variety of social networks (12+), yet the exact process for generating a Klout score is generally not understood. Marketers who make an investment in a partnership with Klout are placing a high level of trust in the accuracy of their algorithms. There is also growing competition in this space with the emergence of direct competitors such as Kred, Peerindex,
and ProSkore (which is free of charge). All of these companies provide a similar service to determine online reputation and authority. Every service weighs different social media inputs differently. Algorithms for Klout and its competitors have been
changed in the past which has resulted in user frustration and confusion. For Klout to emerge as the Nielsen of social media analytics, it will need to convince businesses and industry experts that it has the superior algorithm. Additional value  exists in the size of the user base that each platform is able to generate. Klout must keep their audience engaged and deliver value to individuals for it to remain viable.



Klout: An Approach for Spotify

Creative Strategy: Grow the user base of the Spotify music platform
by generating awareness and registration from tech-savvy consumers. Sharing
songs and playlists is a major selling feature of the platform so spreading the
word through social media communication was an obvious choice. The target was
music, technology, and social media influencers and the objective was to
convince them to transition to Spotify.

Tactics: Using Klout Perks, key influencers were offered early access to Spotify for
free along with a chance to get Spotify Premium. Influencers would then pass
along the perk to their friends and spread the word to their large audiences –
a 100% digital approach.  

Results: 34 million true impressions, 32,000 tweets, and word-of-mouth advertising which propelled Spotify into a leadership position in the United States.  




References

Caligiuri, Ryan. "Seven Top Marketing Trends for 2013." The Globe and Mail, 14 Dec. 2012. Web. 13 Feb. 2013

Stevenson, Seth. “What Your Klout Score Really Means.” Wired. 24 Apr. 2012. Web. 12 Feb 2013



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