Kids vying to be seen as social influencers

Social butterfly; Flickr photo by massdistracton

Excerpt of WSJ piece on what PeerIndex calls the S&P rating of kids’ online social presence:

When Katie Miller went to Las Vegas this Thanksgiving, she tweeted about the lavish buffets and posted pictures of her seats at the aquatic spectacle “Le Reve” at the Wynn Las Vegas hotel.

A week later, the 25-year-old account executive at a public-relations firm got an email inviting her to a swanky holiday party on Manhattan’s West Side.

“At first I was confused,” Ms. Miller said. She read on to learn that she had been singled out as a “high-level influencer” by the event’s sponsors, including the Venetian and Palazzo hotels in Las Vegas, and a tech company called Klout, which ranks people based on their influence in social-media circles. “I was honored,” she said, sipping a cocktail at the $30,000 fete.

So much for wealth, looks or talent. Today, a new generation of VIPs is cultivating coolness through the world of social media. Here, ordinary folks can become “influential” overnight depending on the number and kinds of people who follow them on Twitter or comment on their Facebook pages.

People have been burnishing their online reputations for years, padding their resumes on professional networking site LinkedIn and trying to affect the search results that appear when someone Googles their names. Now, they’re targeting something once thought to be far more difficult to measure: influence over fellow consumers.

Some of the “influence” is real, but other youth are trying to game the system, befriending lots of others on Twitter in “one night stands” in the hopes of upping their own popularity and then dumping these “friends” a day later, or dramatically increasing their number of retweets in the hopes that they get greater attention or credit for Twitter traffic. Others realized that by raising the ratio of “those Twitter accounts following you” to “those Twitter accounts you follow”, they could increase their score. Companies are trying to use these services like Klout, PeerIndex, TweetLevel or Twitalyzer (which processes Twitter, Facebook and LinkedIn data) in an effort to determine which teens are popular and trusted by others.

Read “Wannabe Cool Kids Aim to Game the Web’s New Social Scorekeepers — Sites Use Secret Formulas to Rank Users’ Online ‘Influence’ From 1 to 100; ‘It’s an Ego Thing’ ” (Wall Street Journal, By Jessica E. Vascellaro, Feb. 8, 2011)

While they are in their early days, it’s not clear that any of these companies yet score accurately the true influence of youth or adults, as evidenced by how this can be gamed.

See also, “Web of Popularity Achieved by Bullying” (New York Times, by Tara Parker-Pope, 2/15/11) that notes that “students near the top of the social hierarchy are often both perpetrators and victims of aggressive behavior involving their peers.”

Companies using social capital data for betting on people’s lives

Flickr photo by idletype

The Wall Street Journal recently noted  how insurance companies (Aviva PLC, Prudential Financial, AIG) bet on whom to insure at what rates through data mining.  Much of the info gleaned from online purchases and other digital traces is more lifestyle: is the insurance applicant an athlete? a TV addict? a hunter?

But some of the information is social capital-related:

Increasingly, some gather online information, including from social-networking sites. Acxiom Corp., one of the biggest data firms, says it acquires a limited amount of “public” information from social-networking sites, helping “our clients to identify active social-media users, their favorite networks, how socially active they are versus the norm, and on what kind of fan pages they participate.”

For insurers and data-sellers alike, the new techniques could open up a regulatory can of worms. The information sold by marketing-database firms is lightly regulated. But using it in the life-insurance application process would “raise questions” about whether the data would be subject to the federal Fair Credit Reporting Act, says Rebecca Kuehn of the Federal Trade Commission’s division of privacy and identity protection. The law’s provisions kick in when “adverse action” is taken against a person, such as a decision to deny insurance or increase rates. The law requires that people be notified of any adverse action and be allowed to dispute the accuracy or completeness of data, according to the FTC.

The article also notes that Celent, an insurance consulting division of Marsh & McLennan, indicates that such online social-network data could be mined for policing fraud and in making pricing decisions: “A life insurer might want to scrutinize an applicant who reports no family history of cancer, but indicates online an affinity with a cancer-research group, says Mike Fitzgerald, a Celent senior analyst.  ‘Whether people actually realize it or not, they are significantly increasing their personal transparency,’ he says. ‘It’s all public, and it’s electronically mineable.’  ”

We’ve written earlier about other life insurers using social capital data in making insurance decisions, but in those cases, the individual was being asked directly about his social and civic involvement.  [See also this blog post about social capital and healthcare.]

We applaud the life insurers for coming to the late realization that social capital data is strongly related to health, but strongly believe they should be more transparent about what they are doing.  Then it wouldn’t violate privacy concerns and it would have the added benefit of making the insured better aware of the positive health impact of being more involved civicly and socially, which might actually induce those who are less engaged to become more so.

See earlier blog post on loss of digital privacy and digital traces left online.

Read “Insurers Test Data Profiles to Identify Risky Clients” (Wall St. Journal, 11/17/2010, by Leslie Scism and Mark Maremount)