What the Klout Acquisition Means for the Future of Content Marketing

It’s safe to say that much of the tech world was surprised yesterday by the announcement that social influence scoring company Klout would be acquired by the social customer service company Lithium Technologies at a price of at least $100 million. I say much of the tech world specifically because, unlike social media giants Facebook, Twitter & LinkedIn and despite being around for nearly 7 years, most of the general, non-techy population has likely never even heard of Klout.

Klout has been in the (tech) news lately as they:

• Launched Cinch in September of 2013. Cinch is an iOS app providing a Quora-like Q&A service in which Klout uses it’s Klout Experts database to match queries to experts in various topics. Interestingly, the launch of Cinch came more than 3 months earlier than the much more acclaimed release of a similar Q&A search/discovery app, Biz Stone’s Jelly.
• Announced the #NewKlout -- just last week, nonetheless. #NewKlout represents a shift in focus to more intelligent content discovery and distribution. In their own words, “Unlike most apps that suggest content for your personal consumption, Klout intelligently recommends content that will strike a chord with your unique set of friends, fans, and followers.”

Even though Klout has weathered its fair share of criticism from marketers, tech enthusiasts and the broader media over the past 6 years, news of the reported acquisition is not only a win for Klout and their investors, but it may signal a more significant trend in social media and content marketing going forward.

Influencer Marketing & Social Scoring

One of the more interesting manifestations of this new trend on content marketing is the leveraging of user generated content from key individuals -- sometimes dubbed influencer marketing. Companies like SnapMyAd & Freebie are leading the charge in the attempt to solve the puzzle of how to monetize an individual’s social influence.

With slight variations in how they function, essentially both SnapMyAd and Freebie are mobile apps that incentivize users to share content promoting a particular brand, product or business in exchange for free stuff. This content could be in the form of an Instagram picture, a tweet or a post to Facebook.

SnapMyAd specifically touts a system they call “Social Scoring” which allows an “influencer” to get more votes for an entry in one of their promotions by accumulating Facebook “Likes” and Twitter “Favorites” on the content they share to these respective networks. The ‘Likes’ and ‘Favorites’ translate into votes inside the SnapMyAd mobile app promotions.

On the other hand, Freebie boasts a more seamless social sharing system while focusing more heavily on driving traffic to an actual physical location. After a user downloads the app and connects their social profiles (Twitter, Facebook, Instagram & Foursquare), they are given a “social influence rating” which allows them to redeem products at businesses that have partnered with Freebie. Once a redemption is made, Freebie generates a social posting that goes out on the user's social networks. In the company’s own words:

“Freebie is a mobile application that enables everyday people to leverage their social media networks to obtain remarkable products, services and experiences for free from local businesses and brands.”

What does it have to do with Klout?

While Klout was initially adopted by individuals, the idea of creating a score for social influence is equally applicable to brands both large and small. In fact, with the proliferation of content marketing and the growing importance of having a clean and robust social, local and mobile digital presence, establishing thought leadership (ie, social influence) through the creation and distribution of great content (including user generated content!) is perhaps the single most important aspect of digital marketing for brands these days.

Some critics may argue that the nine figure price tag for a social media company that, in some ways, feels somewhat directionless is the epitome of the bubble that has been brewing in the tech space (specifically social media) as of late. We don’t think so, though. On the contrary, we think Klout -- much like SnapMyAd and Freebie -- is (and has been) on to something pretty intriguing.