The role of GDPR in sending Klout to the grave

The news is in. Klout will shut down the day that the European Union’s General Data Protection Regulation (GDPR) comes into effect – on May 25.

To all of our fans: after careful consideration we have decided to shut down the Klout website & the Klout Score. This will happen on May 25, 2018. It has been a pleasure serving you, and thank you for your ongoing support over the years. Details here: https://t.co/xCNdYachxF

— Klout (@klout) May 10, 2018

Klout, the app that was aimed at helping marketers gauge the sphere of influence of individuals, was bought over by Lithium Technologies about 3 years ago.

Announcing the demise of the service, Lithium’s CEO Pete Hess said: “The Klout acquisition provided Lithium with valuable artificial intelligence (AI) and machine learning capabilities but Klout as a standalone service is not aligned with our long-term strategy.”

While the CEO doesn’t say that the GDPR is the reason for the company shuttering the product, a Lithium spokesperson told TechCrunch that “the upcoming deadline for GDPR implementation simply expedited our plans to sunset Klout.”

GDPR, the EU’s new data privacy law, makes life more challenging for social media companies, and presumably, for Klout, makes business extremely difficult. So, for example, with the GDPR in place, the company might find it incredibly hard to give the Pope a score of 89 and Casey Neistat a score of 80.

“The fact that they’re closing on GDPR date – I guess – means that the ‘management overhead’ is too great taking into account the changes they’d have to make, or the ‘remaining value’ of keeping it separate, with GDPR-required tweaks, is so low that they’ve decided it’s a sensible time to shutter it,” Dan Barker, a digital marketing consultant told eConsultancy.

“The fact that they don’t mention GDPR perhaps means Lithium is still finalizing their compliance steps, and therefore don’t want to shout about it too much,” Barker added.

The fact is, Lithium made a decision to stop supporting Klout because it didn’t add much value to marketers and monetizing it was challenging. Even after the inner working of the algorithm was revealed, the score had little business value in the eyes of consumers.

At the end of the day, for anyone buying or selling influence on social media, the Klout score meant nothing more than a count of followers, likes, and shares. In fact, marketers trusted the latter more because they understood it. So, it’s not a big loss for the industry – but worth noting that a new law sent a social media analysis platform to the graveyard.