Instagram Is About to Make Pretty Little Ads Out of Your Photos

    December 18, 2012
    Josh Wolford
    Comments are off for this post.

Instagram just updated its privacy policy to fall in line with Facebook’s updated data use policy allowing the transfer of user information back and forth across both services (or affiliates, as they call each other). That move was expected after Facebook recently adopted their own proposed policy changes after the third and final Site Governance vote failed to produce a binding mandate.

Although the free flow of data across Facebook, Instagram, and its affiliates may be enough to cause concern, some added content to the latter company’s privacy policy has large-scale implications for not only user privacy on the site but also for how the service fundamentally operates.

The updated terms of service, which go into effect on January 16th, include a good amount of new content. Instagram has taken the time to expand upon the terms & conditions, as well as the sections on proprietary rights in content. They’ve also included new sections on arbitration and added a few new disclaimers and liability waivers. The changes range from new language about bullying and harassment of other users on the network to new language concerning arbitration and Instagram’s opt-out process for participating in class-action lawsuits.

Do you use Instagram? How do you feel about its new ability to share data with Facebook and vice versa? Will this new policy affect how you use the service? Will you stop altogether? Let us know in the comments.

You can check out the updated terms of service here.

But it’s one change in particular that hints at a new ad product that users could be really uncomfortable with – and it sounds a lot like one Facebook users should be all too familiar with – Sponsored Stories.

Facebook Sponsored Stories, as you’re probably aware, use your friends’ already-completed actions across the site in order to promote a product or service. Burger King, for instance, pays for Facebook to display user actions concerning Burger King in their friends’ news feeds. You’ll recognize this as the “John Smith, Dan Baker, and Julie Clark like Burger King” stories on your news feed. Sponsored Stories can also include posts from the page in question, or check-ins and more. The idea behind them is that they feel more organic than traditional side-bar ads – and they do. Sponsored Stories pop up inside users’ news feed and are sometimes indistinguishable from non-sponsored stories, except for the “sponsored” tag that is easily glossed over. If done right, a Sponsored Story doesn’t really even feel like an ad – except for the fact that it’s totally an ad. A social media-specific, clever ad, but an ad nevertheless.

On Facebook, Sponsored Stories are already prevalent on both mobile and desktop. That’s to say that they are hard to avoid. An average Facebook user that checks their news feed a couple of time a day will be hit with multiple Sponsored Stories ads. But starting soon, that same Sponsored ad saturation may affect everyone’s favorite hipsteriffic photo-filtering community, Instagram.

Call it the Facebook influence on a company they just purchased, but Instagram has modified their terms to explicitly allow for the use of users’ likeness in connection with sponsored content. Here’s the new addition to the policy:

Some or all of the Service may be supported by advertising revenue. To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you. If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to this provision (and the use of your name, likeness, username, and/or photos (along with any associated metadata)) on your behalf.

And here is the old version, which doesn’t mention using users’ likeness in promotion, only that promotional content will in fact exist on the site:

Some of the Instagram Services are supported by advertising revenue and may display advertisements and promotions, and you hereby agree that Instagram may place such advertising and promotions on the Instagram Services or on, about, or in conjunction with your Content. The manner, mode and extent of such advertising and promotions are subject to change without specific notice to you.

So starting January 16th, Instagram has to go-ahead to use your photos in ads. Simple as that.

Let’s take a look at what those ads could look like. Instagram gives itself the ability to let “a business or other entity pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take.” That could be something as simple as displaying the fact that Josh Wolford “liked” a photo by Starbucks on other users’ Instagram feed. That’s using my name, likeness, and actions to create an ad.

But when you really look at the language, you see the type of ads the company is really planning on cashing in on.

By giving Instagram the ability to use your photos with associated metadata in promotional content, you’re giving Instagram the ability to turn your pretty little lo-fi photos into incredibly organic-feeling advertisements. If you take a photo at a beautiful resort, that “associated metadata” knows where you took it. That means that your filtered photos of your toes in the ocean can be quickly turned into an ad for “Sunset Resort” in Key West.

This is the first real attempt to monetize Instagram.

Declan McCullagh over at CNET says that another tweak in the policy language could also mean that Instagram now has the authority to license your photos to anyone for use outside Instagram – think a giant stock photo database.

“One section deletes the current phrase ‘limited license’ and, by inserting the words ‘transferable” and ‘sub-licensable,’ allows Facebook to license users’ photos to any other organization,” he says.

Although that exact same language is repeated in Facebook’s ToS, nobody has complained that Facebook is creating a giant stock photo database of users’ personal photos.

For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

To me, Instagram’s new policy language seems to suggest Sponsored Stories inside the service using user photos, not turning the service into a Getty images of sorts, full of user-generated content. Although the language does discuss “sub-licensing,” meaning that sort of thing is not entirely off the table.

We also have to consider what this means for the future, as Facebook and Instagram become closer. With Facebook and Instagram freely sharing information now, and with Instagram’s assurance that it “reserves the right, in our sole discretion, to change these Terms of Use from time to time,” who’s to say that an Instagram-Facebook ad product isn’t feasible? Your geo-tagged Instagram photos sure would look pretty nice as a Sponsored Story on a Facebook news feed, right? It sure feels like this is the logical conclusion of this whole thing.

It appears that someone at Instagram/Facebook did their homework (as we would hope they would). The language of the new policy seems almost tailored to address all of the concerns brought up in Facebook’s very public Sponsored Stories legal battle, which has just entered its penultimate hour. In that case, a handful of users sued Facebook for using their likenesses in Sponsored Stories without their expressed consent and without compensation.

With this privacy policy rewrite, Instagram is setting the stage to be able to make very pretty, very organic-feeling ads out of your content. Instagram has to start making money, and this is certainly a viable revenue source. Nobody should be surprised by this, considering the company was bought by Facebook for nearly a billion dollars.

And as users, to think that a free service as popular as Instagram wouldn’t have to eventually come with ads, is short-sided and entitled. I guess you could always pay a subscription fee instead…

But the bottom line is this: next time you snap a lo-fi filter on that burger photo, just know that you might be doing some unpaid photog work for whoever made it. You know what they say: if you’re not paying for a product, you are the product.

What do you think about Instagram deploying Facebook-like Sponsored Stories? Should users accept that a business has to monetize, and this is just part of it? Or is this the kind of thing that would force you to stop using Instagram? Let us know in the comments.

  • Dustin

    People are not going to be happy. But the real question is will enough people actually care.

    • Rob

      Most won’t even notice, let alone care @Dustin.

      • http://www.wiseguysjobs.com/ Employment for jobs

        Most won’t even notice,

  • http://scbreview.info/reversemobile/ ReverseMobile

    People need to be aware of the consequences of your online actions. These sites are going to do themselves in, eventually.

  • Tiago vieira

    How do I feel about this… Just deleted my Instagram account!

  • http://www.bloketoys.co.uk BlokeToys

    Yep, I agree that people will still do nothing about it, they won’t care. People are fickle when it comes to this kind of moral outrage. They’re scream and shout about it and act all infuriated, but when it comes down to actually deleting their account, they just can’t do it.

    Facebook and Instagram knows this, they would have done plenty of research before breaking the news, and I’ll bet they’re pretty confident that they can get away with it without losing too many of their users.

    It’ll be funny to watch the first person complaining when a massive company uses their photography for an ad campaign. No doubt there will be some who will scream about it, thinking about the money THEY are not getting from the use of their content. But there will be nothing they can do, because they gave permission through use of the service.

  • Bill

    Won’t be using it then.

  • http://pinterest.com/7e55e/ 7e55e

    to post 1 picture you need to give them acces to all your pictures
    this is very suspicious, but nobody seems to care….
    i guess people will realize it again when the damage is done
    Facebook has waited long enough that people depend on it
    and they will abuse this power, i hope people will realize this and leave
    time to move back to Myspace?

  • http://www.margaretwaage.com Margaret Waage

    I’m not happy about the idea of my photos being picked up and used for any commerical venture without my consent. When Facebook first launched it seemed cool to share content but now that it’s become clear that if you are a professional and rely on your work for income sharing is not in your best interests. Monetizing Instagram beyond existing TOS is like saying anyone can sleep in your house without regard to the cost of heating the room where they sleep or the food they eat while being under your roof.

  • http://www.circuscitykids.com Dawn Schrieder

    I am deleting my Instagram account, at least they won’t get to use my pictures from there.

  • Natalie

    Gutted to hear this news, I love Instagram but I thinks it’s personal sharing your photos, it’s already getting annoying with the amount of followers you get just because they won’t follows! Better make Christmas an Instamas because I will be deleting mine.

  • http://carolinegerardo.blogspot.com/ Caroline Gerardo

    Why do you think CEO Kevin Systrom lied to the Department of Corporations and claimed there were no other offers to purchase than Facebook? ( Twitter had made offer(S))- Facebook has already tested the waters with users giving up the keys to their safe deposit box, and not many users walked. The reasonis in Return on Investment – making money selling Your creative images, words, face, friends, purchasing habits etc on and on to every detail. No different than the online pirates who steal books and as soon as you send a DRM notice they open a new website.
    I love Instagram’s platform, but I’ve never posted my greatest work on there knowing someone will eventually steal. I see Pinterest making an alliance with Twitter, we’ll see how this all shakes out. The best solution is for a competing platforms (there are many) to pop up and make the billion that Facebook paid become the worst investment they ever made. Let me know which one is the next juicy sliced meatloaf…

    Caroline Gerardo

  • http://Mabuzi.com Kevin

    You guys are right most sheeple dont care and will give personal information and photos away freely.
    What would take marketers years to get FB gets in an instant. Your face for facial recognition, your politics, your family, your children, your likes, your friends etc….you give it away freely and FB sells it.

    How else can you get a free service and not own or make anything yet still make billions? Yep your personal information.

    Imagine seeing your face on a beer advert you did not pay for?

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