I’ve mentioned before that I think Klout will be a billion dollar company (or has the potential to be). Most people think that their influencer score is the key to their future success. To some degree they’re right. Klout seems to be experimenting with brands on marketing to influencers with high Klout scores and influence in a particular topic. Solid revenue with that will get your valuation into the tens or even low hundreds of millions. But billions? I think not. So why am I so bullish on Klout’s potential? Here is why: Advanced Contextual Targeting.
Klout is one of the few companies in the tech world right now where users are comfortable giving the usernames to all their social networks. This is VERY significant because most of these networks contain public information and once you know that this Twitter account and this Facebook account is the same person, you can get a complete profile picture of this person with knowledge of only one network.
So how does Klout make money from all of this? If Klout utilizes the same technology that enterprise listening tools are using (e.g. Sysomos, Radian6) and analyzes a person’s entire public profile to fully understand who they are, what they are interested in and what their true influence is, Klout can have a better understanding of a particular person than any other company on the web.
Here is where the money comes in. Media companies are spending billions of dollars a year marketing to you via banner and text ads around the web. Major ad management companies (e.g. Doubleclick) have cookies on every site and are tracking you across the web. They already know where you visit and what you click on but they don’t know anything about what you’re interested in and who you interact with. See where I’m going?
Klout can add a layer of social data (no personal info such as name and contact info but more like interests and influential reach) that can help better target costumers across the web. CTRs (click-through-rates) will soar based on this Advanced Contextual Targeting. Advertisers will be happier. Consumers will get more targeted ads. Klout will be worth billions.
