Few topics arouse as much fierce debate as Klout, the company which claims to provide a standard measure for individuals’ online influence. Perhaps politics. Or religion. But unlike debates about the latter two topics, which often center around larger world views regarding morality, economics, and the role of institutions, Klout is a different animal.

I don't have much Klout.

Klout is personal. It’s a number. Right next to your face. Scoring your supposed value.

This little number bothers a great number of people, either because it (bizarrely) impacts their sense of self-worth, or because it invokes a competitive urge to outrank friends and colleagues.  Naturally, this leads detractors to criticize Klout’s scoring algorithm, its mechanism for correlating topics with individuals, and its relevance as a gauge for real world influence.

Much has been written about these deficiencies, but my favorite assessment is by Jeff Moriarty, who writes, “The problem is that social influence is a hideously tricky thing to measure.” Jeff then goes on to describe how, in the past, Klout pegged him as an expert on terrorism. Now, I don’t know Jeff very well. But I’ve met him several times, and from what I can tell, he’s a smart, hardworking guy who is very involved with a lot of projects that benefit the Phoenix community. He hardly seems like a terrorist, and as his blog post explains, he’s obviously not one — despite what Klout may have purported.

And like Jeff, Klout thinks that I’m influential on topics that aren’t among my areas of expertise. They include: Walmart (a store I visit maybe 1-2 times per year), Spain (a place I’ve never been), and Tim Tebow (a person who I tweet about only occasionally, in order to goad a friend of mine into a reaction). Keep these three topics in mind, because I’ll return to them in a moment. But suffice it to say that I know little about each one.

However, despite Klout’s struggles, it’s not time to write off its value.

Case in point: Michael Arrington, who mocked Klout in a past blog post, titled, “My Detailed Thoughts On Klout.” The post contained exactly one word, meant to summarize all the gnashing of teeth over Klout scores and topics: “Why?” But even a skeptic such as Arrington has changed his tune.

Earlier this month, Arrington posted an about-face regarding Klout. Extolling Klout’s value, Arrington announced that his CrunchFund venture capital firm had invested in the service. Arrington writes:

“They’ve relaunched the product and a lot of the tricks that people used to game the system are gone… Klout will have a constant, ongoing battle in fighting gaming. But that’s ok. Google is in a constant fight defending the integrity of PageRank, too. And yet we find it interesting. Klout is very much like a PageRank for people and things. And it can be much more useful than just helping companies hand out perks.

First, there’s a lot of data being collected and processed by Klout. A staggering amount of data about people and things from a wide variety of social services.”

So you see, Klout’s just not that into you.

And really, it never was. To expand on Arrington’s point, Klout’s not into serving you, it’s into serving the data about you to companies that can use it for all sorts of purposes, ranging from helping brands target people who like to converse about specific topics, to potentially serving as a data source for other forms of advertising.

Klout’s business model shouldn’t — and probably doesn’t — come as a surprise to people who understand the value of data for targeting ads to consumers. So big deal, right? Klout’s like a lot of other businesses that offer data for customer segmentation?

Kind of, but it’s different in one important way. Klout’s data isn’t unique as a data source for demographic information. It’s more valuable a source of information about: (1) The willingness of specific individuals to spread the word about specific topics, and (2) Whether their viewpoints are perceived as insightful when they do spread the word. So Klout’s data is less about who people are, and more about what topics they’re willing to engage around.

Purchase Funnel (click for source)

Think about the marketing funnel. Klout’s data helps out with awareness initiatives at the top of the funnel (as do Facebook ads), by helping brands target people (I won’t call them influencers, necessarily) who will spread these brand messages via social media channels. By comparison, Google AdWords is geared toward helping companies with sales closures at the bottom of the funnel.

But I digress, so let’s get back to the subject of whether Klout has value (Hint: it does).

Klout scores are yet another valuable data point for digital marketing and brand managers, especially in light of today’s resource constraints.

Unemployment in the United States is currently north of 8%, and the underemployment rate, defined by the Wall Street Journal as “people who want to work but haven’t looked in the last four weeks because they figured no jobs were available and those working part-time gigs but would prefer full-time positions,” is above 15%.

What does this have to do with Klout? Well, despite record profits for many large corporations, it’s clear that a lot of the jobs shed by companies during the recent Great Recession aren’t coming back — at least not in the near future. And thus, marketers today are having to do more with less. Fewer people, but with more powerful tools and technologies.

The data from these technologies, of which Klout is just one — think of data from CRM systems, marketing automation systems, social media monitoring systems, etc., as others — is being aggregated by marketing managers in order to analyze audiences and plan campaigns. So that’s just it: Klout is one of many data points used by marketers today to help them conduct efficient audience analyses, at a time when they can’t rely on a sizable team to do this kind of work. That’s why Klout scores are now available in Radian6, for example. It provides additional context for data analysts tasked with analyzing online conversations about brands.

But this doesn’t excuse Klout’s inaccuracies, right? Don’t incorrect topic/person correlations and influence scoring actually make it harder for marketers?

It makes the data imperfect, yes. But imperfect is not the same thing as “not valuable.” Consider the data on website traffic from sources such as Alexa, Compete, Doubleclick and Google Trends. It’s widely understood that these tools provide inaccurate data that may vary widely from what a website manager will see in Google Analytics. And yet, as Kristi Hines writes on the KISSmetrics blog, “Are these sites 100% accurate? No, they’re not. But they all offer some good data that you can use for competitor research.”

This takeaway applies to Klout. It may not perfectly quantify topical influence for each individual, but it indicates an individual’s willingness to talk about a subject. And this signal of willingness is important for marketing managers.

This, in turn, brings me back to the three topics that I mentioned above: Walmart, Spain and Tim Tebow. Am I, as Klout has posited, an influencer on any of these topics? No, not at all. But have I demonstrated a willingness to discuss them online? Yes, I have.

Regarding Walmart, I do sometimes refer to it on Twitter as the future epicenter of the zombie apocalypse (I don’t hold it in high esteem). I also wrote a blog post titled, “Facebook is Walmart, and We Love Boutiques,” in which I examine negative reactions to Facebook’s acquisition of Instagram. Similarly, on Twitter, I have praised Spain’s Olympic basketball team as a worthy competitor to the U.S. team. Lastly, during NFL season, I frequently link to stories about Tim Tebow’s successes, but in a playful way to torment a friend who despises Tebow.

So clearly, Klout has picked up on something here. It has correctly identified some level of interest, on my part, in these topics.

Sometimes #tebowing lacks context (click for source)

But what Klout is missing, for now, is context.

Klout sees that I have interest in Walmart, but it lacks an appreciation of my mindset. It has also identified some interest in Spain, albeit lacking the specificity that my interest is only related to its basketball prowess. Finally, Klout knows that I’m willing to link to articles about Tim Tebow, but it misses my associated attempts at humor.

Imagine if (or rather, when) Klout closes the context gap. The value of its data will grow exponentially. And there is good reason to think Klout may eventually get there, because the team behind the tool is continually refining it. As Sarah Lacy of PandoDaily writes about Klout’s latest re-tooling:

“Klout does something very impressive if you step back and think about it. A relatively small team of people crunch 12 billion points of data everyday across every open, active Twitter profile they can get their data-grubbing paws onto, some 100 million profiles. That’s equivalent to one-third of the US population. And that challenge only grows as more people are creating more data every single day. The fact that Klout can come close to making sense of all that should be considered a coup.

The new version is taking into account real world influence — through a combination of bringing in 12 times more data points everyday, and taking into account things like Wikipedia pages and weighting LinkedIn profile data higher.”

The takeaway here is that Klout is surfacing a set of signals from an enormous amount of information, and it’s getting better by broadening its pool of data. As “real world” sources — and potentially contextual cues — become integrated with Klout’s existing data sources, its end product increases in value.

Value. For brands. Not necessarily for you.

Klout, then, is another example of the increasingly understood (and increasingly trite) rule that “If You’re Not Paying For It, You Become The Product.” Klout is just a set of data points, one set among a broad array of data points that marketing managers are using — that they need to use — in light of the resource shortages that are plaguing organizations of all sizes. The team behind the service is continuing to refine it, and additional rounds of funding from investors such as CrunchFund will only provide the Klout team with the resources necessary to make it more valuable.

But not necessarily for individuals. Because, despite the big, bold numbers next to our faces, and the perks that companies are awarding us based on them, it’s really not about us.

Thus, you may hate Klout. But as Joe Fernandez, the CEO of Klout, says, “At least we’re relevant.” Because Klout is. Maybe just not for you.

Follow @shanebarnhill