If you think an article about your pull in the sphere of social media is not relevant to you, I urge you to keep reading. Social media influence is becoming a new form of currency, and it is already affecting you.

To put it simply, third parties are measuring your digital footprint. Every time you like a post on Facebook, tweet a message, or share an article on LinkedIn, companies that assess your influence are watching. And they’re keeping score.

But the scope of your social media influence is not just a vanity plate or validation badge for the young and hyperconnected. It’s actually playing an increasingly important role in business decisions and milestones in our lives. How much influence you have can make the difference in whether you get that coveted job, are accepted by your school of choice, or score that exclusive event invitation.

But what is influence in the social media realm?

The notion of influence is nothing new. Influence in the digital world or anywhere else is the capacity to affect the behavior of others. Studies of the power of influence can be traced back to the 1940s and work by Paul Lazarsfeld, among others, who thought that most people are significantly swayed by secondhand information and opinion leaders.

On any given day, we make decisions that are influenced by what we read, who we talk to, and where we are. Think about it this way: In your group of friends, one person tends to have the latest information about where to go and what to buy. In his book The Tipping PointMalcolm Gladwell calls this type of influencer a “maven” that is, someone who has information on a lot of different products or prices or places.

These people like to share their opinions and views about places, products, and people, and they relish this role. They love to share and communicate. And we listen to them and follow their recommendations, because we trust them and know who they are.In fact, research shows that we are more likely to buy something if a friend recommends the purchase.

A 2009 report by Nielsen, a company that keeps tabs on consumer choices worldwide, revealed that 78 percent of consumers trust peer recommendations more than advertising. In 2012 that number climbed to 90 percent. It turns out that trust is a crucial part of the digital age and plays an important role in the sharing economy.

The democratization of influence?

Brands used to rely on celebrities to endorse their products and get people to buy them. Sure, it’s still a good idea to get Roger Federer to endorse your product, but not all brands have such deep pockets. Instead, smaller companies seek out “mavens” to help them get the word out about their products.

But celebrity status in social media isn’t restricted to movie stars and sports icons. Today, anyone who creates good content and can get others to read and share it, thereby altering the behavior of others, is seen as an influencer. At the end of the day, the idea is to increase a product’s exposure among potential consumers by identifying the people who will enthusiastically share their experience with their networks.

Every public relations or marketing team knows that its ultimate goal is to get others to talk about its product or service. Traditionally, PR operations typically have courted journalists and reporters, but these days they also seek out regular people who spend time online talking about the products they use. Entire conferences focus on how to identify and engage brand advocates. And corporations spend billions on customer relationship management software, such as Salesforce, that allows them to track their customers’ social media accounts and purchasing habits.

The economy of influence

But how do brands identify these mavens whose recommendations influence the actions of so many others? Klout, PeerIndex, and Kred are just a few of the outfits trying to make sense of the massive amount of data that we users create. Each day, it adds up to about 2.5 quintillion bytes of data. That’s the same amount of digital information in about 4.5 billion hours of CD-quality audio enough to keep you busy listening for the next half-million years.

Since its inception in 2008, Klout has become the most successful index of cool. Klout keeps track of your tweets and your activity on Facebook, as well as a slew of other factors, and then it assigns you a score from 1 to 100.

Based in San Francisco, Klout has effectively made online influence matter by adapting its monitoring methods continuously. They have both provided brands with an easy way to identify their influencers and created the need for individuals to keep up their social media credentials.

A wealth of information is available about our consumption patterns and reading habits. Klout and its competitors are making sense of millions of data points and structuring in a way that’s interesting to individuals and useful to brands.

Klout Perks are rewards offered by companies to users with influence in specific areas or who have high overall scores. Cathay Pacific recently invited influencers with a Klout score of at least 40 to visit their first and business class lounge at San Francisco International Airport. The Palms Hotel in Las Vegas will bump you up to a better room if you have a high Klout score. And Virgin America inaugurated a new route to Toronto by passing out free tickets to 120 influencers.Other power brands including Nike, Audi, and Disney also include Klout offers in their marketing efforts. According to Klout, the average participant in a Perk program generates about 30 pieces of content and millions of potential impressions. That kind of exposure is incredibly valuable.

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What the Klout?

Regardless of whether you care about social media, finding out your Klout score can be an unsettling experience.

According to Klout, its formula incorporates 400 signals from seven different networks. These data are processed on a daily basis and used to update users Klout scores. The number of Facebook friends you have, how many times they like or share the content you share, the number of tweets you generate, how many connections you have on LinkedIn, and even your Wikipedia page all figure into your Klout score. But the algorithm has generated much controversy, and it’s easy to see why.

In August 2012, Klout changed its scoring system resulting in many users with lower scores. For example, pop star Justin Bieber saw his Klout score go from a perfect score of 100 down to 92. (The average score is 40.) The idea behind the ever-changing system is that it more accurately takes into account the rapidly changing social media landscape. In a recent blog post, Professor Ryan Thornburg of the University of North Carolina at Chapel Hill details what goes into Klout’s mysterious algorithm.

While Klout claims that your score is a reflection of influence, not activity, many users have found that sharing often raised their scores significantly. To put it bluntly, Klout can be gamed. More ardent critics note that no system can really encapsulate influence in a single score and that the algorithm is flawed.

Others, such as Anthony Kosner of Forbes, have suggested that Klout traps individuals into checking their scores and fixating on their progress?a result that works well for Klout but doesn?t provide any real value to individuals, other than a bit of ego stroking.

Barack Obama

Why You Should Care

It is easy to dismiss Klout and social media influence as distractions that only matter to those crazy people who are connected 24/7.

But the signs indicate that this issue of influence is not going away. As our digital footprints become larger and we engage more with people online, services like Klout provide what was once furnished by a credit history, standardized test results, or a reference letter from a past employer. In fact, Klout is constantly working to make itself a bigger part of our digital life: In September 2012, Klout and Microsoft’s Bing search engine closed a deal to include Klout scores in search results.

In fields in which influence matters, such as marketing and advertising, Klout scores even determine whether people are hired. Recently, Salesforce.com published a job opening requiring a minimum Klout score of 35, which unleashed considerable backlash from the leading opinion leader in Silicon Valley. Given these developments, it is not so hard to imagine that Klout scores will become part of your LinkedIn profile.

Job seekers are not the only ones affected. Klout is now entering places where scores and grades have long been the form of currency: universities. For instance, Professor Thornburg, who wrote the explanation of the Klout formula, attributes 20 percent of students? grades to the improvement of their Klout scores over the course of the semester. In fact, he encourages his journalism students to analyze what made their scores go up or down. So far, it seems, students are having a hard time cracking the code.

While one could argue that he’s lazily outsourcing grading, it might not be such a bad idea to teach journalism students the ropes of a system that will likely play a role in their professional futures. Earlier this year, a Florida State University professor decided to base his students’ grades on their Klout scores to motivate them to think seriously about social media influence. His decision generated a lot of controversy. Curiously, much of the outrage came from media, while other academics asked to permission to emulate him.

Beyond the Score

After getting over my own score (in the low 60s), which actually places me in the 95th percentile, I could not stop myself from checking it once in a while. While I don’t publicize or flaunt my Klout score, I do use Klout to learn more about my perceived value as a distributor of news, to understand my audience better, and to see the topics for which I am considered an influencer. Not sold? Marc Schaefer offers a practical perspective on why you might want to consider paying attention to Klout.

A while ago, I decided that, instead of trying to hack Klout’s formula and game the system, I was better off by using it to learn something from Klout about my network and my use of social media that I might not have considered before.

By the way, before you go check out your own Klout score, will you follow me on Twitter? Hey, it might bump mine up a point or two!