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Why Social Influence Matters to Businesses
 

Eight industry insiders define what social influence means, how to measure it, and why it truly matters.

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" 'Special' individuals have an important effect on the opinions, beliefs and consumption habits of a large number of 'ordinary' individuals..."

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Social Media has forced businesses to reassess the definition of influence. Influencers are telling us what to do on a regular basis across the social sphere, but who is listening and how does it affect our behavior and buying decisions?

A trend that has gained considerable attention in recent years is measuring influence, both in real life and in the social world. Depending upon whom you talk to, these people who are termed to have influence also have considerable value in the marketing world and weight with other peers in Generation Y.

The Oxford English Dictionary defines the traditional noun "influence" as: The power or ability to affect someone's beliefs or actions, a person or thing with such ability or power, the power arising out of status, contacts, or wealth and the power to produce a physical change.

But real-world and social influence is far from the same thing, despite the unavoidable truth that social networks have considerable connecting power. "Whether they are called 'opinion leaders,' 'influentials,' 'influencers,' 'e-fluentials,' 'mavens' or by some other name, the idea that a small number of 'special' individuals have an important effect on the opinions, beliefs and consumption habits of a large number of 'ordinary' individuals has become conventional wisdom in the word-of-mouth marketing community," wrote Duncan Watts, the principal research scientist at Yahoo! Labs and a former professor of sociology at Columbia University, in a paper titled "Measuring Word of Mouth."

Inc.com's Lou Dubois spoke with eight different people who consider influence a big part of their job. The panelists, representing various backgrounds and beliefs on influence and in business, included:

Joe Fernandez: Founded San Francisco-based Klout in early 2008 to measure influence across the social web. The Klout Score is the measurement of your overall online influence, with scores ranging from 1 to 100 with higher scores representing a wider and stronger sphere of influence. Klout uses over 35 variables on Facebook and Twitter to measure True Reach, Amplification Probability, and Network Score.

Carol Leaman: CEO of PostRank Inc., an Ontario-based technology company that monitors and collects social engagement with online content in real-time across the web. Publishers and people interested in their content use PostRank Data Services and Analytics to gauge influence and reach with audiences.

Duncan Watts: Principal Research Scientist at Yahoo! Labs and a former professor of sociology at Columbia University, his research on influencers was listed among Harvard Business Review's Breakthrough Ideas for 2007, and published in the Journal of Consumer Research.  He is the author of Everything is Obvious: Once You Know The Answer.

Matt Monahan: Director of social media at New York-based EpicSocial, the social advertising arm of The Epic Media Group. Matt is also a Stanford University graduate and thought-leader for new and innovative socially driven marketing platforms.

Eric Peterson: Senior partner and founder of Portland, Oregon-based Web Analytics Demystified and Twitalyzer, which measures five fundamental aspects of a individual or company's use of Twitter: influence, signal, generosity, velocity, and clout.

Mark Schaefer: Executive director of Knoxville-based Schaefer Marketing Solutions, with 28 years of global sales and marketing experience and advanced degrees in business and applied behavioral sciences. Schaefer is a frequent writer on the topic of influence.

Scott Roen: As vice president of OPEN Forum and new product & capabilities development at American Express, Roen manages a team charged with the development of new card products, reward platforms, and OPEN Forum.

Peter J. Auditore: Head of SAP's Business Influencer Program and is a senior fellow at the Society for New Communications Research. As a veteran of four technology startups including Zona Research, Survey.com and Exigen Group, Auditore has twenty years of experience in selling and marketing software to LE and SME organizations worldwide. He also assisted in development the Influencer Scorecard.

Why Social Influence Matters to Businesses: Definition of an Influencer

Leaman: An influencer is someone whose opinion or information has an impact on someone else's thought process or action.  Their influence can be rooted in, or arise from, many things, for example:
.  they are considered an "elder" and therefore full of wisdom and experience
.  they are people with whom we have long-standing and respected relationships
.  they are considered (rightly or wrongly) to be an expert or authority in a particular topic area, so there is a perceived level of belief, trust and accreditation
.  they are "loud" and get attention (either positive or negative)

Watts: Everyone has their own definition of an "influencer" and they're rarely the same definition: sometimes the term is used to refer to "ordinary" individuals whose influence propagates via direct interpersonal networks.  Other times it is used to refer to celebrities like Oprah Winfrey, whose influence propagates via the mass media.  And at other times still it is used to refer to intermediate cases such as bloggers, columnists, experts, authors, and other semi-public figures whose influence is some mixture of mass and personal influence. In principle, there's nothing wrong with having different types of influencers, who exert different types of influence.  But because people don't adequately specify what they mean when they talk about influencers, it's never really clear what they're talking about.

Auditore: An influencer is someone who is honest, trustworthy and knowledgeable, in addition to having a history of managing and creating influence flow through a large ecosystem. They also have a significant following with track record of consistent opinion that is objective and not influence by outside entities, they are not pay for play.

Peterson: We are cautious to separate "influence in Twitter" from influence in the "real world."  In Twitter we see the measurement of influence as relatively simple --- if you have influence over people they are going to either engage you in conversation (@mention you) or retweet the things you are saying. Influence in the "real world" is either incredibly easy or nearly impossible to determine.  It is easy to determine in that key public figures clearly hold influence over our lives --- say, for example, President Barack Obama.  When President Obama makes a decision, those decisions influence hundreds of millions or billions of lives across the globe, and that influence can be measured in hundreds of different ways.

Schaefer: Most people would point to influence as an ability to persuade another person to take action. On the social web, however, I also think there is a matter of degree.  It is one thing to get people to "like" a cause on Facebook and quite another to open their checkbook and volunteer their time.  I think you also have to consider the intensity of the action.

Dig Deeper: How to Measure Your Brand's Online Influence


Why Social Influence Matters to Businesses: How Social Media Has Changed the Way Influence Works

Monahan: The social web has democratized influence and diluted its primary motive. The previous motive was to get legacy media paid-laid-made. Influence is now used (more purely) to create revolution, educate, entertain, drive culture, build brands and (even) sell products.

Roen: The role of the influencer remains the same as does the end goal – create buzz, increase traffic and drive sales. The difference comes in the amplification of the message. The advent of Facebook, Twitter and other social media channels has allowed influencers to extend their reach to a broader but still targeted population of consumers. Social is enabling an individual to topple a government or raise millions for a charity practically overnight.  Businesses may not have supreme power, but they can work with those that do, the individual influencer.

Auditore: Social media has made influence spread at the speed of the Internet, the only thing holding it back is the time zone we live in. Influence now flows like water everywhere their isn't censorship. Everyone is a journalist but not everyone has a story to tell, so their influence may wain.

Watts: I don't think we know, but one very interesting aspect of social media is the growth of "masspersonal" communication: an interstitial mode of communication that lies somewhere between the traditional categories of personal and mass communication.  Celebrities like Lady Gaga, for example, have always had followings, and therefore some manner of influence, but until recently their communication with their fans was almost always indirect, inter-mediated by whatever mass media channel was talking about them.  Now Lady Gaga can communicate directly with millions of her Twitter followers, and if she wants, follow them in turn.  It's still not clear how this has changed the kind of influence she might have, but it's pretty interesting nonetheless.

Dig Deeper: How to Get Retweeted


Why Social Influence Matters to Businesses:  The Metrics That Matter When Measuring Influence

Fernandez: There are lots of signals of influence online.  Likes on Facebook to retweets on Twitter for example.  The one thing we found that does not fully tell the story of influence is network size. At Klout we go beyond simple counting of metrics to look at how engaged people are with the content you create.  It's important to understand what proportion of a person's content actually drives actions and how influential are the people taking those actions.  We actually measure influence between each relationship so we can say how much a person influences you versus all the other people you are connected to.

Watts: Ideally what we should be measuring on is the effects of influence: whether someone has actually taken an action they would not otherwise have taken, changed their mind about an issue or a brand, or otherwise been impacted.  Unfortunately measuring effects is extremely difficult, and tracing them to the influence of another individual (or for that matter an ad or article, or some other piece of information) is even harder.  So what people tend to do instead is measure proxies for influence, like how many followers someone has on Twitter, or how active they are online, or how many of their peers name them in a survey of people they would go to for advice. 

Leaman:  It depends on the kind of influence you're talking about.  If it's influence about brand perception for example, then social media listening platforms that aggregate brand mentions and apply sentiment analysis can help.  Measuring how influence results in purchase conversions is much more difficult, but we're getting there.  In the PostRank world, we focus on influencers who create content, and how that content is engaged with across the social web (where, by who, how many times) as a measure of the influence of the author (and therefore his/her message).  We think that's critically important when trying to figure out who is actually being listened to; if their content is proliferated through the social networks, we can tangibly measure that spread.

Dig Deeper: 11 Best Web Analytics Tools

 
Why Social Influence Matters to Businesses: The Most Effective Ways for Companies to Engage With The Right Influencers

Watts: First, they need to be very clear what it is they're trying to accomplish. Then they need to identify which metrics actually measure progress with respect to their real goals, not just proxy measures that may or may not be directly related.  Then they need to design and conduct experiments that discover which kinds of influencers most effectively increase those metrics.  And finally, because the most effective influencers may also be the most expensive to recruit, they need to balance effectiveness against cost, ultimately maximizing efficiency.  None of this is easy, but it's increasingly possible. The essential first step is recognizing that our intuition about influence is hopelessly misleading, and our definitions of influencers are woefully inadequate. So if companies want to discover how much and what kind of influence different categories of influencers actually wield, they will need to be very precise about their hypotheses, and they will need design very clear, empirical tests.

Fernandez: Companies need to really respect that influencers have built a level of trust with their network that can never be compromised.  It is important that it is made clear to the influencer that they are free to say whatever they want about their experience with the company.  Companies also need to be very mindful that influencers are people. Dealing with an influencer is very different than dealing with the New York Times or an influential publication.  A personal touch that lets the influencer know that they are respected goes a long way.

Schaefer: So far it seems that companies are using traditional methods, that is to say, ineffective methods to reach influencers!  Now that I have been determined to be an "influencer" on Twitter and through my blog, I am receiving a continuous stream of unwanted offers from strangers. If you really want to connect with people, develop a relationship and get to know them, just like you would in any other business setting.

Auditore: Architecting sustainable engagement models that are good for the influencer and good for the company is paramount. Avoid episodic engagement models like simple speaking events and then it good bye until next time. Putting professional communicators in front of influencers that aren't just PR people is key to building sustainable relationships that achieve your communications goals.

Dig Deeper: The Future of Advertising is Here


Why Social Influence Matters to Businesses: Best Examples of Businesses Capitalizing on the Trend

Monahan: Charlie Sheen raised mass consumer awareness for Internships.com by tweeting out a job requisition for his own TeamSheen social media intern by using Adlyads. The Charlie Sheen campaign delivered unprecedented results: 200K+ clicks, 20K+ retweets, and 15K+ shares, "Likes" and comments on Facebook! Adly Ads is disrupting legacy media celebrity endorsements and the confines of organic influence growth on the social web.

Roen: The most well known is Proctor & Gamble; they built an entire business out of this with Tremor.  They've been an innovator in this space from the creation of Soap Operas to their most recent launch of ManoftheHouse.com.  That said, the reality is small businesses never had the luxury of big brand campaign budgets to get customers so they intuitively and out of necessity leveraged word of mouth and influencers.  The best recent examples are Twitter and Foursquare's recent launches at South by Southwest in 2011.  This conference is a mecca for influencers and these companies used the conference as their big marketing budget; and it worked in a big, big way.

Fernandez: We've been lucky enough to work with brands like Turner and Nike who are thought leaders when it comes to the power of social media influence.  Turner created some really cool campaigns around the premier of shows like "Southland" and "Are We There Yet?" that built a great deal of buzz across social media by giving influencers access to show content before it aired.

Dig Deeper: How to Use Location-Based Social Networks for Business

 
Why Social Influence Matters to Businesses: Why Influencers Matter to Brands and Business of All Sizes?

Roen: Social media influence is not simply about the numbers, but rather about value.  Customers pay attention to the insight and expertise influencers share because they have a grasp of the market and offer what is perceived to be valuable and credible information. Forming relationships with the right influencers can help a brand's message reach target customers via a trusted source. This third-party credibility develops advocacy and encourages word-of-mouth.  All size businesses benefit, but small businesses disproportionately benefit because you don't need large budgets and often times influencers prefer smaller brands because they can really help people discover new products.

Peterson: Provided brands and businesses are circumspect in how they approach "influencers" and are prepared to have an open and honest dialogue, social influencers create an opportunity for businesses of all sizes to spread the word.  Conversely, if businesses aren't circumspect and treat "influencers" as a number --- a huge mistake, by the way --- any influencer-based strategy is bound to fail and, in some cases, create intense backlash. Social relationships are the same relationships you have always had; only now everyone can see your mistakes.

Fernandez: Every customer deserves amazing service.  Influencers have the ability to unlock markets though.  Businesses have always used how much a person spends to determine lifetime value and then made incentive and support decisions from that.  Now that influence can be measured, network value can also be evaluated to see how much business a customer might be able to refer to you through their network.

Schaefer: Determining influence is so critical to brands because this is what drives word of mouth validation – typically the most powerful and cost-effective marketing method available. So refining this influence model will be an absolute breakthrough for brand managers and businesses of all sizes. Certainly there is no reason this could not be driven down to a local level.

Dig Deeper: How to Use Social Media for B2B Marketing

Last updated: Mar 31, 2011




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