Remember when you looked to TV and newspaper ads to tell you what to buy? Me neither. That's because now many of us are more likely to make an informed opinion about purchases—and many other new discoveries—based on the views of people we connect with online and through social media. Influence, that is to say, is big.
How big? A new survey by Initiative questioned some 8,000 web users age 16-54 in Argentina, Australia, Canada, China, Germany, the Netherlands, U.S., and U.K. to find out how they were influenced in purchase decisions by social media interactions. The results are kind of amazing: A huge 99% of the "top 10%" of influencers reported that their friends quiz them before making a big purchase. This top 10% has a disproportionate influence on the opinions of others—because 72% of them access content in print, online and mobile form more than once a day, compared to just 18% of the bottom 10% of influencers.
A different study, by Market Force, underscored the fact that brands are leveraging social media to promote themselves. Embedded in the study were stats on the power of the average user to spread brand-related messages: 81% of U.S. respondents said posts from their friends directly impacted their decision on purchasing something, and 80% or respondents said they'd tried new things based on suggestions of friends.
This is a big departure from the static print ads and traditional TV spots of the past. Initiative's study even included advice for brands to move well beyond the thinking of a traditional 30-second ad spot, and push out additional material like behind-the-scenes footage...all to drive discussion and lead to more online chatter that will lead to brand discovery. It also suggests that brands build a team of "relevant social influencers" to spread new ad campaigns and stimulate dialog.
Suddenly it becomes clear why GM is once again interested in using Facebook as an advertising vehicle. It also explains why Appinions, a company that analyzes data from five million sources to determine the influence of a brand, topic or person and promises to hook up companies with the most relevant influencers, earlier this month raised an extra $3 million in funding.
Meanwhile influence itself is gaining a kind of currency, even while it's an ephemeral concept that's tough to nail. That hasn't stopped sites like Klout, PeerIndex and Kred from being all over the news, with Klout in the lead. Those three all do a similar thing: Apply an algorithm to analyze a user's online behavior and come up with a simple numerical measure of their influence factor. Technically these firms are applying some maths called social network analysis, because the "importance" of someone in a social network isn't simply how active or how many other people they're linked to—it's also a question of how well-connected and active each of these others are too.
Companies of all stripes are becoming aware of the power of high-value social media influencers, which is why they're signing up to campaigns like Klout's Perks. The idea is that via Klout, high-scoring individuals are "rewarded" with a physical gift or perhaps a discount voucher if they're influential in topics connected to the brand in question. The brands hope these influencers will discover the joys of the new product, and then go on to mention the brand in a positive light in social media. It's a form of reward marketing that's quiet, in the background, and very likely to be a growing phenomenon if those survey statistics mentioned above are a hint at the future. Klout has reportedly doled out about 700,000 perks to its users, lest you doubt the size of this sort of business.
There's even anecdotal evidence that Klout scores are being considered by some employers when looking at the resumes of potential new hires, which may be directly relevant for jobs in, say, social media marketing and a less-direct measure of your personality for other jobs. As noted in Wired, Klout's executives suggest that high Klout-score individuals may one day end up boarding planes sooner, or get better hotel rooms. Klout is contentious to say the least, however, and its algorithm (not unlike Google's) is both mysterious and controversial—leading to debates like this extended thread on Google Plus. But even if Klout falls by the wayside, measuring influence is such a powerful idea you can bet a different company will try to make it work.
Finally, a peek at a possible future: As influence grows you can bet that many users will try to bump up their score, and that will strengthen the power of this whole new type of discovery economy. Will we one day wander through a shopping mall with our influence score being transmitted via Bluetooth from our smartphones, in the hope we'll get a discount or a special offer in a store? Better pump up your influence just in case.
[Image: Flickr user Stefano Corso]