Instagram’s advertising plans and how it will share your data with Facebook

It seems the day we were waiting for has arrived: Facebook is figuring out how to monetize Instagram. When the social network dropped the better part of US$1-billion for the retro photography service, the skeptics muttered that Instagram wasn’t exactly a money-making machine: it’s ad-free, after all. Well, not for much longer.

If you take a look through the updated terms of use Instagram published late yesterday, you may have noticed a few lines of legalese which paint a not-so-obscure picture about what the service is planning to do next. It states:

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. You acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such.

The section about advertising in Instagram’s previous terms of use document wasn’t as explicit:

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.

Now, instead of simply agreeing to allow Instagram to place ads and promotions “on, about or in conjunction with your content”, by continuing to use the service from January 16 2013 onwards, you are agreeing to let Instagram turn you and your actions into an advert. Similar to Facebook’s adverts, which show you posts from pages your friends like, it seems that Instagram plans to use information about which accounts you follow, the photos you’ve liked and snapshots you’ve shared to make money — and not always make it clear that it’s an ad, and not original content.

The part about using any “associated metadata” also has some interesting implications — theoretically, if you’ve been helpfully geo-stamping all your filtered squares as you go along, a business could pay Instagram to show your followers the photos you posted when you visited their store, restaurant, hotel, etc.

Privacy and information sharing

In addition to this policy update, Instagram is also increasing the amount of information it shares about you with Facebook. Since the acquisition, the two services have already began transferring likes between images posted on Instagram and Facebook, but its new privacy policy seeks to deepen the relationship.

In the updated document, which also comes into effect on January 16 next year, Instagram says it has the right to share your data — such as “information from cookies, log files, device identifiers, location data, and usage data” with businesses that are part of the same company as it is, such as Facebook and its “affiliates”, as well as third party service providers. It says it will share your cookies with advertisers, but will anonymise the data and combine it with the information gathered from other users.

While the fact that your data is being shared with unknown parties and advertisers online isn’t new, the policy really does make it clear that your information is being stored and sold. Instagram tries to put a positive spin on it though, saying that sharing data with Facebook will allow it to “fight spam more effectively, detect system and reliability problems more quickly, and build better features for everyone by understanding how Instagram is used”. It also says that its not changing its core experience, as you “still get to choose who can see your Instagram photos, and you still get to choose whether you post your photos on Facebook.”