Not a day goes by without another article being published about how social media will change business forever. Several companies have sprung up in the past several years including Klout, Twitalyzer, and PeerIndex that attempt to measure the value of social media usage, or more broadly, ‘social influence’. As I read articles about how social influence is now used by companies to ‘Fan-gate’ or ‘Klout-gate’ their pages with special content and offers, I can’t help but draw a comparison to the ubiquitous FICO credit score.
FICO: Likelihood a customer will go 90 days delinquent within 2 years
What was once just use to determine credit-worthiness, FICO has morphed into a way to customize car insurance rates, evaluate candidates for job openings, decide whether to rent an apartment to a tenant, etc. While arguments have be made that there is a correlation between low FICO scores and a lot of undesirable behaviors, it’s quite another to blindly segment customers using credit attributes for non-credit purposes. Yet this behavior happens all the time…
Social influence score: “The probability of…”, what exactly?
The problem with trying to assign a value to social media interactions is that it’s completely business-specific. Unlike FICO, which at least has a strict definition (ignored as it may be), social ‘influence’ can mean any number of things, depending on whether the person uses social media for work or pleasure (and in many cases, both). Even better, the number can be gamed depending on which accounts you allow to get scored as part of your ‘influence’ (although, adding accounts only leads to increases in your score…for now).
Despite these different social influence score shortcomings, it is easy to see why companies like Audi, Subway, TNT Network, and others are willing to take a gamble that social influence (in this case, Klout score) has a correlation to something; as multi-million/billion dollar companies, the only way to get top-line growth is to experiment with new channels. As it stands now, I’m having a hard time believing that the Klout ‘Perks’ is an effective way to market (that’s a whole ‘nother blog post!), but again, I can’t fault companies for trying.
Sanity still prevailing…
While I can see a parallel of social influence scores and FICO, luckily industry practitioners (the web analysts and marketers most likely experimenting in these new channels) are speaking out pretty loudly about understanding the positives and the cautions behind these scores.
I’m also glad to see (at least in the case of Twitalyzer), score providers participating in the conversation to discuss the issues surrounding the use of social influence scores in general. Eric certainly has a lot of clout (pun intended!) in the web analytics community, so the message is definitely being heard there…but it’s up to all of us measurement folks to get the message out further in the marketing community on the proper usage of any model score.
Not FICO…not now, not ever
Ultimately, social influence scores will never achieve the level of widespread abuse that the FICO score has seen in the business world. For one, there’s the voluntary nature of social media, which keeps large populations of people from ever being scored. There’s also the fact that social influence is only calculated based on ‘affirmative’ activity (people ‘Like’ your contributions, they retweeted your articles, etc.), which cannot never be as predictive as also including negative interactions (like the FICO score does with missed payments).
But just because social influence scores probably won’t get abused in the same way, that doesn’t mean that us digital measurers should relax. It’s up to us to make sure to keep stressing that just because companies can do something, doesn’t mean they should! If anything, Kenneth Cole’s PR disaster should show that not all ‘influence’ is good, even if it makes your Klout score go up by 30 points!
“Without any clear strategy around what you’re going to DO with all these fans – you’re really just kind of a Facebook Marketing ho, with no direction.” - digitalanalytics101.com
UPDATE - 10/27/2011: With Klout making a change to their algorithm yesterday, and many heavy social media users seeing large drops in their scores, it seems like there ARE businesses and industry practitioners trying to use Klout as a pseudo-FICO score. While my score dropped about 20% (from 51 to 40), I’m like most who see the whole “social influence” scoring as nothing more than an amusing game.