Klout plans on Tuesday to launch a redesign of its site that makes it more obvious what the company does: help users understand and take advantage of their social influence online.
Klout went through a lot of change in the last year. It went from two to 30 employees. It raised $8.5 million in venture capital from Kleiner Perkins and Greycroft Partners. It tweaked its influence ranking algorithm many times (often tweaking the people who have come to depend on it, who sometimes saw their score lowered). It moved to a funky new office in a former shoe warehouse in San Francisco’s hippest start-up neighborhood, SOMA.
And last but not least, Klout had to deal with exponential increases in the amount of data it processes and delivers each month. For example, the company is now on track to process about 1 billion API calls per month, up from 100 million in January of this year. That’s just insane.
What Klout didn’t do in that time is change its Web site, or make clear to visitors what its business model is and who it is serving. The company is trying to do that today.
Klout CEO Joe Fernandez describes what his company offers as a “social credit score.” He told NetworkEffect, “We want to be a standard. We want everyone to know their Klout score.”
Meanwhile, all sorts of companies are finding Klout useful. The company, which has only ever responded to inbound sales queries, according to Fernandez, has run campaigns for Audi and Hewlett-Packard, and works with Nike and Disney on an ongoing basis.
(Fernandez is pictured above wearing his custom Klout Nikes; in the video below he explains why it’s more interesting to help people understand their influence rather than companies understand who is influential.)
While Justin Bieber may have the highest Klout score of all–a perfect 100–effective campaigns often target people in the 40 to 60 range, who are topically influential rather than “mega superstars,” as Fernandez put it. (I don’t take freebies, but I’m apparently in the sweet spot, with a Klout score of 53.)
Klout finds these influential social media users and emails them about special, often local, promotions–say, a trip to Toronto to inaugurate Virgin America’s service there (which has since been discontinued, sadly), or a free laptop from HP, or a weekend in Napa using the new Audi A8.
Recipients of Klout’s emails about free stuff–which are not contingent on tweeting about the goodies–open the emails 80 percent of the time and opt in 70 percent of the time, said Fernandez. And because the promotions are so targeted and have measurable influence over their followers, the effective CPM that brands pay is “still really low,” he claimed.
But Klout feels it’s important to clarify that it is a consumer-focused business. “We’ve thought of 16 possible businesses but the only place we make money is campaigns,” Fernandez said. “We want to be Google, not comScore,” he said, explaining that he means it’s more valuable to be an enabler of many businesses than an analytics seller.
Klout’s business is similar (but not necessarily directly competitive) to other social endorsement companies that use its free API, like Ad.ly and MyLikes (Update: A representative for MyLikes comments that the company has stopped using Klout.). That’s an overlap the company is well aware of, said Fernandez. “We’re a company that’s built on everyone else’s API, so we have to be cool about it and let the market evolve,” he said. “Five hundred of the 2,000 [companies using the Klout API today] are probably doing things that compete with things we may want to do.”
See also: Our interview with researcher Duncan Watts on the temptation of understanding influence.