The Difference Between Popularity And Influence Online

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Digital influence is one of the hottest trends in social media and it is also one of the least understood. Like some relationships on Facebook, “it’s complicated.”

Klout, PeerIndex, Kred and many others are investing millions of dollars to understand how our social media activity translates into influence. Within the last 90 days alone, Klout took in a Series C of $30 million from Kleiner Perkins at a whopping valuation of $200 million. PeerIndex also recently announced an investment of $3 million. The market for influence is only heating up with more entrants expected to debut and acquisitions or mergers likely on the horizon.

Since 2009, I’ve studied the influence landscape. After a few years and a few dozen articles on the subject, I focused on developing a comprehensive report on all things influence. This week, I published the report, “The Rise of Digital Influence,” as part of the Altimeter Group.

The report aims to help businesses obtain desirable outcomes through social media influence. It specifically examines Klout, PeerIndex, Kred and 11 other influence software vendors, the elements that define influence, and what each service “actually” tracks to help businesses (and consumers) appreciate and leverage their value. It also examines six brands, including Virgin America, Microsoft (NSDQ: MSFT) Phone, and Starbucks (NSDQ: SBUX), that have publicly piloted digital influence programs.

Early in my research, I learned that the definition of influence was elusive or in some cases, down right incorrect. But, I can tell you this – influence is not popularity and popularity is not influence. It’s so much more than that.

Vendors claim to track influence, but none of the current vendors actually measure influence. Instead, they track elements of online social capital based on proprietary algorithms of how people engage and connect in various social networks.

After spending a lot of time with brand managers, agency professionals, and connected consumers, it was clear that people focused on individuals’ scores. Brands sought out people with high scores. Users pursued ways to increase their scores. Services built programs that rewarded those with high scores. But very little went into gaining a better understanding of what the number actually meant for brands and consumers alike.

Through very public experimentation, brands are beginning to learn that scores do not matter as much as the context of relationships. Consumers are learning that gaming scores or being part of branded marketing activity without purpose may negatively affect their status online.

Since these scores are imprecise, brands need to take responsibility for translating these numbers into insights. By not clearly defining their social influence goals, businesses have been wasting time, resources, and squandering opportunities to build important relationships.

Businesses need to develop meaningful social influence strategies and define their desired outcomes. What does a score of 74 mean to your business goals and objectives? And, how do you apply it toward effective strategies and supporting metrics? Digital influence is defined as the ability to cause effect, change behavior, and drive measurable outcomes online. But a 74 doesn’t correlate directly to outcomes.

However, each influence software service provides a deeper view of individuals and why they’re scored in a particular way. Even more importantly, these services analyze the elements that contribute to a users contextualized social capital (focus, authority, the nature of relevant relationships, etc.), and how their online activity potentially reaches and affects others. Here, value is in the eye of the beholder – a result of research and how data is interpreted and applied against business objectives. In that sense, tools that measure online activity can provide value if you know what you’re trying to accomplish and how you plan to measure success.

Defining influence, measuring outcomes

Once businesses take the time to learn about digital influence, its benefits, and how to connect with influential consumers, brands can develop meaningful engagement strategies.

When defining a strategy, a good place to start is by going back to basics. Some of the most often asked questions that deserve consideration are:

–What is influence, and what makes someone influential?
–Who is influential in social networks and why?
–How can I recognize influence or the capacity to influence?
–What effect does digital word of mouth have on my business?
–How can I measure successful engagement with influential consumers?

To help you find the answers and more importantly, to get the greatest value out of influence vendors, I included a detailed influence action plan. The plan is designed to walk you through the steps necessary to assess where you are, where you need to be, who can help you get there, why, and what’s in it for them and those who follow them.

Your next steps are then to turn your plan into a working strategy. Here’s what to do next:

— Define the parameters of the program and what success looks like
— Assess vendors based on your goals and identify influencers that will help you achieve desired results
— Design a program that provides value to not only influencers, but also those connected to them
— Measure performance and optimize strategies and experiences from program to program
— Repeat

By studying the people who matter to your business — and the people who matter to your customers — your business strategies will benefit from a new level of customer awareness and sensitivity. Suddenly the score isn’t as important as the elements that earns someone stature within their community. Understanding this will contribute to a more informed, effective and valued engagement program. And at the end of the day, while influence vendors help identify ideal connected consumers, it is up to those who run influence marketing programs to define the “R” in ROI and track the actual outcomes.

For further detail, download the full report.

The Rise of Digital Influence [slideshare id=12083493&sc=no]

View more documents from Altimeter Group Network on SlideShare

Brian Solis is the author of the new book “The End of Business as Usual” and a principal analyst at Altimeter Group, a research based advisory firm specializing in enterprise strategy and disruptive technology. Connect with him on Twitter, LinkedIn, Facebook, and Google+.

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