Social influence company PeerIndex this week closed a $3m Series A round of funding from a group of high profile angel and private equity investors.
Led by Antrak Capital, this includes former Thomson Reuters CEO Tom Glocer, Stephen Klein of Activebuddy fame (which went on to be acquired by Microsoft) and angel investor Sherry Costu.
With this money in the bank, and brands including Atlantic Records, Penguin Books and The O2 all lining up to use its scoring system for marketing purposes, the British contender to Klout is finding a niche for itself.
Whereas Klout is striving to be the 'standard for influence', targeting consumers' egos for the most part, PeerIndex is positioning itself as a leader in 'influence marketing'. We sat down with CEO Azeem Azhar to talk about developments in this space.
Well done on completing your funding - it's great to see a British company doing so well. What’s the money going towards?
We’re going to use the cash to build more partnerships with brands for our influencer marketing offering, to drive growth in our mass-market PeerPerks service and to further develop our influence ranking algorithm.
All of this means that we’re going to be able to offer brands a bigger and better pool of influencers on a global basis for their campaigns.
Tell us about influencer marketing, what is it and how does it fit into a marketer’s armoury?
Influencer marketing is about targeting your promotional spend at the people who have real influence amongst their network of contacts. Deals services like Groupon give money off deals to all and sundry, meaning that you’re largely going to end up targeting low-value deal hunters.
With influencer marketing you can target deals at people who have a large network of contacts that trust them on particular subjects.
Influencer marketing has been around since the earliest days of marketing – brands have always tried to get celebrities and journalists to use their products.
However, these top level influencers are hard to reach and time poor, meaning that it's complicated and expensive to engage with them. Social influence marketing is about reaching the next tier of influence – what we call the ‘mass influencers’.
These people have influence among a large network, but they don’t necessarily have a formal position or job title the defines this influence. That’s made them harder to identify in the past, but services like ours can now highlight them through an analysis of their social activity and networks.
We’ve also put in a place a simple set of mechanics to facilitate targeting them with offers, meaning that brands can quickly and cost-effectively build online word of mouth.
How is PeerIndex different from Klout and Kred etc?
The thing that sets us apart is our ability to identify topic-specific influence at scale. We can tell you whether someone is influential on the topics that matter to your brand, whether that be technology, automotive, literature or fly fishing.
Generic influence scores are all very well, but they’re not much use for targeted marketing. People tend to be influential amongst a specific interest group and it’s not much use targeting someone who’s got a great following on technology for a new novel or perfume.
Some of the other players have introduced manual topic identification, but these are susceptible to gaming and can also never offer the sort of scale brands need.
It’s difficult to ascertain what the real trigger is for purchase, particularly when we’re bombarded with more marketing than ever, so why is PeerIndex relevant?
PeerIndex is relevant because it offers a new level of targeting in your marketing. You can reach just those people who are going to be interested in your product and who have an audience of followers who trust their opinion on that topic.
A recommendation from a friend or social contact is one of the most valuable decision triggers out there, and a PeerIndex campaign is all about driving that social recommendation from trusted voices at scale.
Using PeerIndex scoring to highlight influencers and reaching ‘x’ amount of people via Twitter or another social network is all well and good, but isn’t this just the same as saying that a billboard or TV ad reaches ‘x amount’ of eyeballs? There’s still no guarantee that you’re really reaching people?
It’s more measurable than that. With television or billboards the information is broadcasted with the hopes of hitting as many people as possible with the hope that your target audience will be in that group.
Our algorithm allows marketers to ‘narrowcast’, by pinpointing the groups of people they want to reach based on specific requirements.
So in addition to being more efficient, you can see how many of your influencers have taken up an offer, you can see how many of them have gone onto actively advocate your product and you can see how many of their followers have subsequently interacted with that content through retweets or whatever.
The networked nature of social media means that these numbers can be significant from a small initial target audience, and what’s more the messages that are being distributed are going through networks of trust relationships, magnifying their impact significantly.
Any campaign can generate a top-line figure of potential reach, but this is only one indicator. We see numbers around engagement and advocacy as far more important than simple reach and we’ve developed a lot of approaches to give marketers real transparency and visibility of campaign impacts.
How are brands and marketers responding to PeerPerks so far? Any big names you can tell us about, or are you seeing more interest from smaller businesses at first?
We’ve had a mix of clients so far, from big names like The O2 and Atlantic Records through to smaller businesses like Lookk and Achica.
Scale isn’t really an issue when it comes to the applicability of influence marketing.
The thing that’s really worked well for brands is the ease of rolling out one of these campaigns.
In the past influence marketing has been a time-consuming and manual process, typically involving a PR agency or similar manually identifying and approaching influencers one by one.
Automated influencer identification, combined with straightforward mechanics for facilitating sampling interactions, make the process much more akin to a media buy rather than an agency interaction.
Brands simply specify their perks, choose the topic areas they want to reach out to and the rest is an automated process.
In general the reception has been very encouraging – the idea of influencer marketing is conceptually quite easy to grasp and, once we’ve explained the mechanics of the process, people have tended to buy in very quickly.
A lot of the furore over influencer scoring has questioned how valid this is as a metric. People argue that you can game your score for instance, and as such, people using PeerIndex scores (or any influence metrics) as absolute can lead to lazy PR. Any advice on best practice/using your scores responsibly?
The potential for gaming of scores is something we’ve been aware of from the very beginning and a lot of the work in our algorithm has been to identify ‘true’ influence. It's possible that someone could do all the right things to build an active and engaged follower-base who trust what they say on particular topics, but in that case they are influential.
There’s a chance that an influence algorithm can make mistakes, but there’s just as much or more chance that any other approach is going to make misjudgements.
Even if you manually trawl the social web to try and identify influencers it’s all too easy to misunderstand networks or to misjudge people’s ability to influence that actions of others.
In terms of best practice, I think the traditional rules of interacting with social media apply. We can help you find the right people to talk to, but you need to make sure that your perk offer is appropriate and interesting to those influencers. You also need to make your message to those influencers compelling enough to encourage people to interact.
Obviously we can guide people using our experience from previous campaigns and we’ll always screen perks before they go out because it’s not in our interest for influencers using the service to be targeted with perks that don’t work for them.
We’re not changing the rules of engagement with what we do, we’re just helping people take well constructed campaigns to the right people.
A lot of brands are bypassing 'influencers' to reach out directly to passionate fans, since people we know influence us far more in many cases – how does PeerIndex fit in there? Can it still be used within a peer-to-peer campaign?
The influencers we target – the mass influencers – are likely to be known, at least at some level, by their followers. When you’re talking about traditional influencers like celebrities or journalists then the chances are that they hold impersonal influence, but social influencers will tend to operate in a more personal trust network.
That said, if you want to focus on your established fans then there’s still a role of influence ranking.
Our project with Atlantic Records was about identifying the most influential fans of Ed Sheeran and offering them an exclusive perk.
They had a massive existing base of fans, but we could help them segment that audience and identify the individuals within the base who would drive the largest network effect amongst their followerships.
There's been talk lately of marketing being the next big area to make money from a techology perspective, any thoughts on that?
Marketing as an industry has long been a trailblazer in new technologies, and clearly a lot of money has been made by companies in the online advertising space.
What’s different now is that people are applying the new generation of big data processing techniques to marketing and this is creating a paradigm shift in what people can do with data about their customers.
Cheap processing and storage now means that companies like ours can access and process huge amounts of data about online behaviour to extract insight into purchasing habits.
This might be data about behaviour on websites or, as in our case, about people’s social habits. That information is invaluable in understanding behaviours and relationships that can then be deployed in a range of marketing scenarios. The big output of this is that the way in which brands target and interact with individuals is just going to get more personalised and precise.
These developments are going to build the next generation of multi-million pound companies in the marketing technology space.
What’s next for PeerIndex? More work on PeerPerks?
There’s a whole range of stuff we’re going to be focusing on. Obviously the most important thing is for us to run more campaigns with brands and that’s a major focus.
Beyond that we want to build the registered base for PeerPerks to ensure that we’ve got a larger opted-in audience for those perks campaigns. Finally, optimising and improving our influence algorithm is an endless task and one that’s core to ensuring we generate the best results for clients.