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.

Why Social Media In The Enterprise is Failing So Far

Culture and established process are the key reasons for social media failing in the enterprise. Social Enterprise tools (essentially a Facebook for business use) is a very logical tool for businesses and can be a game-change. And that’s the problem – it’s a game-changer. It’s disruptive. It sets everything on it’s ear. Larger businesses, the Enterprise segment, has spent billions of dollars integrating tools like SAP, or SharePoint etc. SharePoint is a great tool – yet has not truly succeeded when it’s biggest competitor is DropBox. DropBox is used by employees to store and share files online – because SharePoint is too complex. Enterprise tools are complex by nature because they focus on the nirvana of bringing clarity to all aspects of the Enterprise.

Big Doesn’t Quite Get It
The other reason social enterprise tools are struggling to find a grip is that the enterprise management solutions offered by Oracle, SAP, IBM and others don’t really have a truly “social” element to them.  Sure, they include some pseudo “social networking” tools, but they aren’t truly reflective of what a social networking tool should and can do. Just as the social enterprise tools are anathema to corporations, so they are to the manufacturers and implementers of existing solutions like SAP and Oracle. They haven’t figured out how to make money off these tools, so they’re advising against them to their clients. Some elements of social media are in these tools, but not enough. Yet.

We Don’t Want People Partying All The Time
This is a perception issue with social media. We see it all the time in our own research projects. The C-suite is still under the illusion that “social media” or “social networking” is only about kids, teens and college students and that these tools aren’t used in serious ways. We definitely saw this attitude shifting in late 2011 and we suspect in 2012 it will shift even more to the C-suite taking social media seriously, beyond reputation management and simply marketing.

But many a senior executive also may see “social enterprise” meaning people are going to be sending each other jokes and silly videos and planning luncheons with these tools, rather than being productive. Our suspicion is this is largely a problem of wording. The word being “social”. There is a connotation with social, that it is not “working”, that it means being, well, social. This couldn’t be farther from the truth. But perceptions are what they are and so good, effective marketing is needed.

We Haven’t Hit Decade One Yet
The reality is, all these social media tools and services that exist today, haven’t even been around a decade. Enterprises move slow. Adoption of new technologies takes time. The commercial Internet has only just reached 15 years of age. Today, business takes advantage of and leverages the Internet. But social media services, even though they are delivered via the Internet, are still less than 10 years old. Blogging is approaching a decade, but only just. Blogs are the most adopted tool by large corporations, but it took them nearly a decade to get there.

The Marketing Echo Chamber of Social Enterprise Solutions
For the most part, the companies marketing social enterprise tools are doing an amazing job marketing their tools. Not. The problem is, they are marketing them via social media channels. Not where their market is. Some no doubt, are getting to the CEO. But marketing inside your echo chamber is not going to get the message out. As we know, the C-suite reads news online, but social enterprise needs to be the channels they are reading. Engagement by the majority of CEO’s in Twitter, Facebook, LinkedIn etc is still very low outside the tech industry. Publishing articles in LinkedIn is good to garner lower echelon support, but not much more.

2012 Could Be The Year
In 2012, we’ll see a lot more focus on the business value of social media, as we’ll see similar value for social media in civil society. In large part it will be up to the software companies that can figure out a better way to market to and reach the right CEO’s, CIO’s and CTO’s in the enterprise. We also suspect that the likes of SAP, IBM and Oracle will start to look more closely at the value of these tools.

In the meantime, the other big challenge is dealing with the “social” perceptions of the C-suite. And that is not easy. There’s an interesting and good article on Forbes that discusses the logical benefits of Social Enterprise tools here.

Is Social Media a Killer of Corporate Speak?

Anyone connected with the business world has heard or read some form of “corporate speak” or “PR spin” through press releases, interview responses or even via Twitter now. I got a canned response to a “tweet” I sent a while back that was something like “there are complex realities pertaining to infrastructure investments we’re addressing” – what? Then there was the Facebook post for a company stating “while we address dynamic market shifts, we are assessing and evaluating future commitments in this sector.” Uh, right. So is dialogue in social medias going to help change how corporations communicate with consumers and the market? Perhaps is the short answer.

It’s awfully hard to create corporate speak or “spin” on Twitter. Easier in a blog or Facebook. There is a very specific purpose to Corporate Speak just as there is to Finance Speak in annual reports and quarterly results releases.

Purpose of Corporate Speak: To deflect any deeper attention by a complainer or competitor. Also to confuse a competitor as to what you’re really doing. For consumers, it is mainly to say “go away, you’re a drain on our profits and we don’t really care what you think of us.” Such a statement is usually along the lines of “thank-you for your concerns, we’ll be addressing these issues with the appropriate team members in our next meeting on this issue.” Sure they will.

Purpose of Finance Speak: Even more complicated than Corporate Speak. The language is always evolving and twisting in new turns. Financial sector language is not meant to provide clarity to the consumer, it is meant to deflect competitors and convey certain messages to certain targets. In corporate annual reports it is used when trying to gloss over the nasty stuff. For example; “we’re reassessing recent market shifts with this product line to identify new long-term possibilities for sustainable growth” – in other words “we’re screwed cause no one’s buying that product line and we have no idea why.”

But today, people are starting to call companies out, reflecting a drive by consumers and some businesses as well, to seek a more honest and grounded engagement between each other. To be genuine. People want things straight up now. Telling it like it is. Here’s an example of a blogger dissecting a corporate press release filled largely with corporate jargon. And this post about the a brand change for Wendy’s and the explanation of the meaning by the creative director.

Seth Godin is perhaps the greatest banner waver on the frustrations of corporate babble through social media channels. While there is plenty of silly content and pure entertainment in social medias, people are discussing their frustrations on corporate speak and navigating the complexities of how to engage a corporate entity – in other words, just how do you get a straight answer from a company?

The Painful Truths of Social Media

Fortunately, most of the time we get to deliver good messages to our clients from our research. Sometimes though, we have to deliver some painful truths. In the private and public sectors. These are truths that an organization has to wrestle with, perhaps come to terms with and find a way through. Sometimes, a client simply says “thank-you” and sets the information aside to collect dust, buried deep in a digital vault. Other times they embrace the findings and look to evolve.

Where Empirical Research Fails
Traditional research methodologies are still valid, critical and a core part of marketing and citizen opinions and views. But they all fail in two significant ways; 1) these approaches do not understand, account for or measure emotion and 2) these methods do not clearly define the message being interpreted by the audience. This applies to public sector research and private sector marketing research.

An Example of a Painful Truth
Not long ago we completed a research project for a client in the public sector. They wanted to compare some survey work they had done with what citizens were saying about the delivery of their programs. The survey had indicated a fairly good approval rate, but in their view, may have missed more in-depth views that might be found online. This was a very progressive approach. Unfortunately it ended up with some painful truths. Overall the programs were good, but discussions in forums and blog posts presented some very compelling, well-iterated evidence of certain failings that had a deeper impact on the client’s overall operation. Several months later and the client is struggling to effect changes to make things better. They are progressive in their thinking and we suspect will make the changes.

But Some Prefer The Ostrich Tactic
A similar case with a company showed they had missed a market opportunity and failed rather well with customer service. It was a niche market and so not the information that a run of the mill online reputation management tool would have uncovered or been able to place context around. In this case, the company made a concsious decision to simply ignore the information and write off a market segment. Perhaps they are profitable enough to do this.

The Reality is Harsh Yet Opportunistic
The Ostrich Tactic doesn’t work very well today however. The market tends to get louder until the ostrich is ripped from the ground and carried along very unhappily until something changes. It is ideas that become actions that cause change. A good idea, well articulated and then executed empowers people and organizations. Facing the uncomfortable truths of social medias impact on business and society will not be easy at times, but is inevitable. These realities can teach us valuable lessons, which can create enormous opportunities. How will your organization deal with potentially uncomfortable truths that cannot be hidden from?

How Activists Use Social Media Against Corporations

In a recent blog post we showed how activist groups are taking the lead against corporations in social media channels and we observed that corporations need to catch up. Here’s why and here’s some of the ways activist groups are using social technologies to win their causes. A client just this week said to us “we’ve ignored this issue for too long, it’s going to cost our industry a fortune to catch up.” He is very much right.

The Objective of Activists Using Social Media

Companies and industry associations often think the activists are railing against them specifically. While the content of their attacks is, the real objective is to get directly to the target audience that will take action with the content. Part of what activists want is for users online to then re-shape the content, turning it into a meme that goes even more viral.

How Social Media Activism Translates to the Real World

The result activist groups want from their social media forays is multifaceted, but one easy way to understand what the result can be? Citizens who see a heart tugging video on YouTube either email or pick up the phone and call their Congressional Representative, Legislative member or Member of Parliament.

Forget About Being Rational. It’s About Emotion.

Corporations tend to rationalize. Issues are analyzed and researched to make viable business decisions. Activists are not concerned with being rational – they want to be emotional. A rational response doesn’t always work…that doesn’t mean coming out ranting. It means understanding how to use perception and emotion in the response to the activists message.

But It’s Just Kids Using This Stuff Isn’t It?

That assumption can prove a fatal error. Very quickly or as death by a thousand cuts. Youth segments are involved, but even if a teenager sees the message, they share, and often share with their parents. But when you also consider that the average age of a Twitter user is 35 to 44 and Facebook is edging higher, you can see it’s about a demographic that has voting power.

Activists Use A Complex Web of Tools

Pun aside, activist groups are very savvy with social technologies. They use multiple services to deliver content, understanding that different channels appeal to and are used by different demographics. A simple social media monitoring tool is often not enough to understand the complexity of a communications strategy; more in-depth research is often required. Such research online also provides context by the research firm that is not available through a social media monitoring tool or online reputation management service.

Organizational Impacts Can Be Multifaceted

It’s not just having a large mass of constituents calling their elected representatives that can cause damage. It may also take the form of a boycott, incrementally lower product sales over time, an investigation by federal authorities, a series of negative media stories. Senior management jobs may be the sacrificial lamb or serious issues with the board and governance. It may also be harder to attract top talent to your company. Sometimes suppliers can become collateral damage. Activists understand this well.

Steps to Be Prepared

Undertaking an in-depth review of your company or industry associations presence on the Web and in social media channels is a critical first step. You can then have a clear insight into the landscape of Cyburbia, identify any threats or existing issues and gain insight into how activists might be using these tools through a mapping exercise.

Understand That Activists Do Not Use Traditional Media Very Often

PETA creates ads that the Superbowl will not air. They place the ads on video sharing sites such as YouTube or Break.com and then everyone goes to see them. Activist groups do not always need to get the attention of mainstream media anymore and often don’t even bother. While you may monitor traditional channels, assuming the Web doesn’t matter, your sales are dropping and an organized lobby may be instrumenting a legislative change that will cut profits or restrict your business operations. And you won’t even realize until it is too late.

Conclusion

Social technologies such as Facebook, Twitter or Ning enable groups both formal and informal to very quickly come together, create and distribute content at essentially no cost. In 2010 Canadians, Americans and Brits spend more time online than watching television. Add in tablet devices like the iPad and smartphones and you have a heady mix of tools anyone can use at anytime. Does your organization have a process in place to understand the potential impacts or at least monitor Cyburbia?