Klout or PeerIndex & Their Value or Non-Value

We’ve been knocking about the value and veracity of Klout and others like PeerIndex in our offices for some time now and we posted before on the issue of Klout. So we looked at Klout and PeerIndex a little deeper recently, to try and sort out just where these tools sit in the greater scheme of marketing. We then went out to look and compare Klout with PeerIndex to understand their place in the social media ecosystem.

Where Klout is Good Etc.
Klout: Is all about marketing. For the individual, it is an “ego tool” kind of like the social media version of “ego surfing”. Perhaps if you were a geek or nerd in high school you may find some greater comfort in having a higher Klout score that the “in” crowd you were left out of.

Aside from the ego aspect, Klout wants you to publish more content and build more of a network because that is vital to their business model. Their business value is eyeballs and people that appear – the word appear is key here – to have some “influence” in one or more online communities. Your value to Klout is how many people you might potentially have some level of influence with. They sell peoples apparent (not real) influence to brands and products. You as a consumer may get some free products in return for mentioning these products or services. We find no problem with this and quite frankly, it is a great marketers tool. It relies on human’s competitive nature and as a result, will likely do fairly well. Klout will also likely anger consumers as much as Facebook. It is the love-hate relationship many consumers have with social media tools.

Where Klout Fails
But Klout will not help with understand the true “authority” of someone. Influence is, well, interesting, but in real terms, it’s not influence that matters, its authority. This is where Klout fails. It also fails in matters of small, but powerful communities. Klout looks at the Really Big Picture – for brands like Coca-Cola, Nike, MacDonald’s or Wal-Mart. But it fails at a very local level and it fails when it comes to non-marketing issues like civil society.

Where PeerIndex Wins
PeerIndex has taken the approach to “authority” by looking at the topics people discuss the most in primary social media channels such as Twitter, Facebook and LinkedIn. Don’t be mistaken, they are targeting to sell this “authority” to brands in the same way as Klout. And why not? They are a business and the purpose of a business is to make a profit. PeerIndex is a second to Klout who has gained more media and social media attention and holds first-mover status. So PeerIndex has a catch-up job. We found that compared to Klout though, PeerIndex was “trusted” far more than Klout at a 3:1 ratio. The key will be if PeerIndex can attract the eyeballs and conversion. Klout has lots of well, inexplicable dashboard things like “reach” that really don’t tell you anything. We see PeerIndex as being a bit more focused on methodology and greater transparency on their science.

Where PeerIndex Fails
Where Klout is focused on “influence” it seems PeerIndex has chosen “authority”. We find the PeerIndex approach easier to understand than Klout, but they exclude the level of influence. PeerIndex, like Klout, also excludes the cultural and smaller social networks where greater value can be found. PeerIndex is focused on more channels than Klout, which helps (including Twitter, Facebook and LinkedIn, plus Quora and some blogs) but they too miss the secondary, but often more active networks that could yield a greater sense of authority. They may include an individuals blog that signs up for PeerIndex, but they don’t capture (and it would be a challenge to do this) the broader blogosphere or Blog Rings.

Where Klout & PeerIndex Utterly Fall Down
Both Klout and PeerIndex pretty much ignore non-major social media services in North America such as Orkut, BigAdda, MySpace, hi5, AllAfricans.com and many other vital cultural and hobby-based networks. Essentially, both Klout and PeerIndex really only care about the big brands and the U.S., UK or Canadian markets. They completely miss the influence and authority of the Web as a whole and its interconnected communities which is very multicultural and global in scale.

In Summary
Klout and PeerIndex both offer some value for marketers. In major Western markets and well, that’s where the big bucks are and they’re businesses. But when it comes to where the next growth area is in social media, which is civil society, they both fail terribly. But then so do all social media monitoring and reputation management tools. PeerIndex hopes to own the “authority” segment while Klout wants to own “influence” and there is a difference between the two. Someone should own, or attempt to, both influence and authority. That will be a challenge, but isn’t impossible. So choose your poison as a marketer.