Is Klout Really an Ad Network?

It seems like you can’t load Twitter these days without seeing someone talking about Klout. Apparently the company rolled out some updates to their “algorithm” which made a lot of scores drop and my sources tell me that appointments to psychiatrists have risen 23% since the update. Klout claims to pull together a number of factors from how you use social networks like Twitter, Facebook, Foursquare and Google+ to come up with a score. This score is apparently your “influence.”

God only knows how they compute the score and how they figure out what profiles go with which users. I assume if I make an account (I haven’t and don’t plan to) then I can associate that on twitter I am centernetworks, on Facebook and Google+ I am Allen Stern. I also don’t use Foursquare so I guess I can kiss those points goodbye. But since I have no account, I assume my score (I have no idea what it is) is impacted negatively because they can’t pull in all of my accounts and see how truly influential I am. I also wonder how they deal with the suggested user default lists which have given millions of free followers to accounts for celebrities and some select bloggers.

If you are interested in the earliest days for Klout, check out the video I recorded when they presented at the NY Tech Meetup in January 2009.

Should I care more about my customers who have a higher Klout score? Should I perk them more than the others? That will absolutely never happen, every customer of mine will be treated the same. Alexia from Techcrunch posted yesterday with the title, “Nobody Gives A Damn About Your Klout Score.”

But for a while now, I’ve started to wonder if Klout is really just another advertising play/network wrapped up in a score which is wrapped up in a game? A year ago the Twitter game was to tell people via Foursquare where you are. Now the new Twitter game is apparently to “+k” someone for something. Or to shill for a product you were given for free. And who knows what, if anything, happens with those tweets. In any case, it’s a brilliant marketing play by Klout because it infects a stream on a regular basis. I see more of these than I do of the,  “Top Stories of the Day” posts that no one clicks on. I assume people click on these Klout freebie tweets because they too will want a free subway sammich or umbrella or Windows phone.

Here is where the ad network theory comes in. The big play for Klout is the idea that they bring together companies and influencers in categories where the company wants to get some play by using the influencers. The company hires Klout, pays a fee I assume and then Klout suggests users that the company should give freebies to. Microsoft is now giving away Windows Phones to influencers of some sort. I guess I don’t qualify although I would actually be a perfect person for Microsoft to talk to because we are currently working on our mobile strategy. (I will eventually post about Microsoft and why their mobile strategy is so poorly played)

Microsoft isn’t the only company participating in what I call the Klout ad network. Sandwich chain Subway must be a huge advertiser on the Klout ad network because I see their tweets all the time.

The brilliance of this new advertising network is that it gets users of social networks to push a company’s message without it appearing as a full-on ad/shill. I have questioned in the past why the tweets proclaiming that a person just got a free sandwich because of their Klout score don’t include a tag that the tweet is a paid ad. I wonder if we will eventually see pushback from Twitter corporate to label these tweets as ads.

In summary, here is how the Klout advertising network works:

1. company (probably via their “social media agency”) wants to get some buzz going about their product/service
2. company hires Klout to share their product/service
3. Klout picks out users based on their score in a vertical
4. Users get the freebies and shill for said product
5. Company gets lots of tweets on Twitter (and tons of mentions for Klout as a side benefit)

What I don’t know is whether this ad network actually delivers value – it’s just too early to tell. Investors believe in this new ad network, they have apparently put $40 million into the company to-date.

Here are a few examples of tweets related to Subway freebies received by Klout members:

Bloomberg talked with Klout CEO Joe Fernandez and the description of the video also confirms my belief that Klout is a new style of ad network.

Will their ad network work? While I think the idea of the score is silly, the majority of people online will want to pump their scores and if Klout can continue to score good freebies, then their ad network should continue to grow.

Let’s just pray that no company ever considers a Klout score when looking at job applicants.

Feel free to leave your Klout score in the comments, although I am only approving comments from people with a Klout score of 82 or higher.