Klout Acquired: Should We Care?

Posted on February 17th 2014

Klout Acquired: Should We Care?

ImageIn almost a bizarre fashion following a night of discussion with Mark Schaefer and TJ McCue about the validity (or lack thereof) of Klout, right there in my Facebook stream I see a “Mashable” article delivering the news that Klout has reached an agreement to be acquired for ~100 million dollars by Lithium Technologies.

Let’s just say I was surprised. I couldn’t figure out who would want to spend 100+ million dollars on a platform that for lack of better words doesn’t work.

Over the past few years, Klout has been a lightning rod in social communities as there has long been a significant debate as to whether or not Klout should matter. Beyond just the validity of the platform, there have been many influential writers who have called into question the company best known for measuring influence on their handling of privacy and lack of transparency on how they measure influence.

Personally, I have never put much weight behind Klout because I always felt the score could be gamed and that those most willing to be “Active” in social communities could easily drive a higher score. Further with limited real world examples where Klout score impacted business decisions I felt little need to invest in building my Klout score.
 

Klout Did Some Things Very Well

 
On the other hand, Klout did immediately identify a trend in the market and to their credit they exploited it beautifully. What was that trend?

People want to keep score!

In the case of Klout, people want to know how they rank online in comparison to other users. When simple metrics like impressions and reach don’t tell the entire story, Klout stepped forward and started a revolution. This revolution brought on secondary influence measurement products like Peerindex and Kred, and since then there have been an array of new entrants to the market of influence measurement and program development aimed at helping brands solve the problem of picking the right people to work with on influence campaigns.
 

Klout Came Up Short, But Don’t Short Change What They Did For Influence Measurement

 
After their initial splash, Klout came up short. To many they were a bust. What was so promising was tainted by their lack of clarity in how they measure, which left users puzzled and brands weary of using Klout as a true measurement tool for online influence.

However, the acquisition by Lithium Technology, a company that works with brands on their digital customer experience shows promise for what Klout was trying to do.

In my opinion, Lithium wants to integrate influence as part of the customer experience profile. So when brands are dealing with customer experience situations online, there is an ability to quickly identify who the person on the other end is and just how important service success is to the brand.

While I would hate to think that a brand would invest more heavily in one customer over another, it would be foolish to not consider why this may be important. With word of mouth being so critical to future purchase decisions, brands don’t want to upset the wrong people.

At the very least, what Klout has created gives Lithium an immediate boost in understanding the customer profile and the potential to make this ubiquitous with their platform.
 

Back To Where We Started, Should You Care That Klout Was Acquired?

 
In terms of your daily interaction with Klout, even with their new content sharing platform, I find little reason that people should care about the transaction itself.

However, what I do think business leaders, social media consultants, and brands need to see here is that there is a very legitimate intersection between online influence and the buyer’s journey.

Brands looking to fully understand their digital marketing efforts are going to need to invest in tools that help them measure who the most important contributors are to their community. While I don’t believe Klout was or ever will be the answer to this need, I do think the move is a clear indication of what is to come for online influence.

With this acquisition everyone wins. Klout found a home before it vanished into obscurity and influence-marketing technologies just validated its valuation to 9 figures. Now if someone could only come up with an influence platform that really helped brands find those that can move the needle; that just may be a billion dollar idea.

danielnewmanUV

Daniel Newman

Founder/CEO, BroadSuite

Daniel Newman is the Founder of BroadSuite Consulting. An experienced C-Level Executive passionate about Strategy who also loves working with entrepreneurs and their small and mid-sized businesses. Prior to launching BroadSuite Consulting, Daniel served as the co-founder and CEO of EC3, a quickly growing hosted IT and Communication services provider. Before that, Daniel held several prominent leadership roles including serving as CEO of United Visual, parent company to United Visual Systems, United Visual Productions, and United GlobalComm; a family of companies focused on Visual Communications and Audio Visual Technologies.

Daniel is also widely published and active in the social media community. He is the author of Amazon best-selling business book, “The Millennial CEO.” He also co-founded the global online Community 12 Most and was recognized by the Huffington Post as one of the 100 business and leadership accounts to follow on Twitter.
Daniel is also an Adjunct Professor of Management at North Central College. He attained his undergraduate degree in Marketing at Northern Illinois University and an Executive MBA from North Central College in Naperville, Ill. He currently resides in Aurora, Ill., with his wife (Lisa) and his two daughters (Hailey 11, Avery 7).

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Comments

steve jay
Posted on February 17th 2014 at 5:00PM

Hasn't this become an everyday story? 'Incredible' new idea come=s on line, and creates buzz about 'Are they, or aren'[t they good', until someone buys them. Usually, about six months from now, we will be asked "Where did they go?", and the inevitable:

"How Lithium don't know how to use Klout properly."

 

We added MLS Fort McMurray to Klout, but I never got the idea that our audience were spending time on there.