Instagram

With any story requiring nuance, there’s always a trade-off between accuracy and impact. So it was with the growing murmurs around Instagram’s announcement last week, that its terms of service agreement would change in mid January of the coming year. The most commonly shared interpretation was that Instagram had given itself carte blanche to sell its users photos.

That, as it turns out, is an extreme reading of the revision. It gave rise to concerns that Budweiser might use Instagram photos to turn your toddler into their new mascot—probably not what Instagram had in mind. And when users reacted badly to the overstatement, there was no shortage of retorts tilting too far in the opposite direction. Many declared it silly to think that advertisers would ever bother paying for something as frivolous and amateur as the photos that stream through Instagram. The running joke was that Instagram was prepping to steal everyone’s post-processed lunch pics.

That line of thought confuses the artistic value of Instagram photos (which varies wildly) with their value to marketers. A current trend in marketing circles focuses on the purported value of social media interactions. It doesn’t matter to them that the baseline for quality in your Instagram feed rarely spikes above amateurism. What matters is your willingness to act as a “brand advocate.” Amateurism can always be recast as authenticity.

Whether or not that actually works is beside the point. What matters is the willingness of advertisers to take it seriously enough to actually pay for it. If only one thing was made clear over the past week, it’s that Instagram itself thinks they will.

The Verge struck an interesting—which is not to say helpful—balance between ridiculing the panic and analyzing the facts. “No, Instagram can’t sell your photos,” ran the title of its report. But while the article’s author, Nilay Patel, leavens many of the concerns about how Instagram could sell photos posted to its service, the article actually outlines rights that sound a lot like a sale. As Patel explains,

an advertiser can pay Instagram to display your photos in a way that doesn’t create anything new — so Budweiser can put up a box in the timeline that says “our favorite Instagram photos of this bar!” and put user photos in there, but it can’t take those photos and modify them, or combine them with other content to create a new thing. Putting a logo on your photo would definitely break the rules. But putting a logo somewhere near your photos? That would probably be okay.

Instagram selling a license to use a photo in conjunction with a promotion on Instagram may not be as expansive as claiming for itself the privilege of selling away all rights to the image, but users worried about seeing their images used to promote products they wouldn’t consciously endorse are bound to see that distinction as splitting hairs. And well they should: the venue is narrower, but the concerns are much the same.

The New York Times‘ technology blog, Bits, covered much the same ground with less tonal confusion. Among other things, that site’s Jenna Wortham and Nick Bilton noted that, “someone who doesn’t use Instagram could end up in an advertisement if they have their photograph snapped and shared on the service by a friend,” though they legal entanglements may make Instagram and its advertisers wary of such use.

Nor does it particularly matter that the venue is restricted to Instagram. What, after all, is Instagram? A website? An app on your phone? If Facebook embeds an Instagram-branded widget that lets users stream photos to their Facebook page, aren’t the photos that show up there technically still on Instagram? And does that change if they license the same app for use on the websites of paying advertisers? “On Instagram” ends up being an abusively vague limitation, a fact that likely has not gone unnoticed at Instagram headquarters.

For its part, Instagram seems to have been taken by surprise by the complaints. On a blog post published more than a day after the terms of service were announced, co-founder Kevin Systrom pivoted between defense and conciliation. “From the start,” he wrote,

Instagram was created to become a business. Advertising is one of many ways that Instagram can become a self-sustaining business, but not the only one.

He promised also to “modify specific parts of the terms to make [them] more clear,” thereby suggesting that the whole thing was just a misunderstanding caused by unclear language in the new terms of service. Looking at the actual agreement, though, it’s difficult to guess which part might have been unclear. “To help us deliver interesting paid or sponsored content or promotions,” read a section under the “Rights” heading,

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 were worried that Instagram had declared the right to sell your photos for magazine ads, there’s some reason for hope there, but not if your objection was strictly over Instagram’s use to grant your “username, likeness and photos” for advertising of any kind. Systrom’s solution was to argue that those three terms were an error, not an indication of their advertising plans. They really only intended to use your “actions”—for example, what accounts you follow—in order to serve up more targeted advertising.

The word that sprang to most reporters’ minds, or at least their keyboards, was “backtrack.” Rightly so. It’s not really credible to suppose that Instagram would specify the right to license usernames, likenesses and photos when all they really meant was “actions.” It isn’t as though anyone had to ask what they were planning with the change—if the strategy hadn’t been patently obvious, there would have been a muted backlash at most.

Nor do the updated Terms really change that strategy. Systrom’s defense hinged on the idea that users had misunderstood their intent because the language they has used was confusing. If anything, though, the updated language is even more obscure. Users, it specifies

agree that Instagram may place such advertising and promotions on the Service 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.

The language has changed, but not, apparently, the advertising possibilities. Instagram can still pair your username, likeness and photos—now condensed down to “Content”—in conjunction with ads, converting your interactions into endorsements. If anything, the updated Right is even more expansive, as the revised Terms define Content as “any data, text, files, information, usernames, images, graphics, photos, profiles, audio and video clips, sounds, musical works, works of authorship, applications, links and other content or materials [...] that you submit, post or display on or via the Service.” At present, there’s no real way to share music or apps over Instagram, but they apparently felt the need to cover the possibility just in case.

In fact, despite suggestions from some quarters that the passage might be the idle work of future-minded lawyers, the thing made clearest by Systrom’s post was that the change was all about monetizing Instagram. “Our intention in updating the terms,” he wrote, “was to communicate that we’d like to experiment with innovative advertising that feels appropriate on Instagram.” As he would have it, the confusion was merely over how they would do so. But serving up targeted advertising is an old experiment. The real experiment here, as nearly everyone intuitively guessed, is you.

There is a rather glaring subtext in Systrom’s admission that “Instagram was created to become a business.” It’s been less than a year since Facebook announced its ten-figure acquisition of the start-up. So even above the challenge of becoming a viable business—and it’s telling that Systrom’s language implies that it isn’t yet one—Instagram now must justify its existence to the tune of more than a billion dollars.

But wait, there’s more. The purchase was announced in April, just about a month before Facebook’s own initial public offering on the stock exchange. Why would a company busy making itself attractive to investors plunk down a billion (part of it in shares) for a company whose owner talks as though it were not yet a real business?

One potential answer is that Facebook took a hard look at Instagram’s model and decided that, with a few tweaks, it might stand a better chance of paying for itself. Since its purchase finalized three months ago, Istagram has been making changes, like the closing of their API to Twitter, that could be read as attempts to shore up the service’s potential for monetization. That’s important because Facebook has long struggled with securing financial independence for itself. For most of its lifespan, it has survived on hype and private capital. The slowing of private investment in the company may have even been a factor motivating its poorly handled IPO.

No wonder, then, that they’re so eager to experiment with new ways of generating revenue, even at the risk of mucking with their core functionality. Instagram likely feels the burden of paying not only for itself and justifying it’s billion-dollar price tag, but also of taking up the slack at its parent company. A gambler who owes a bookie may feel anxious, but just wait until the bookie needs the money to pay off his own debts. That’s when things get really tense.

A certain weariness prevailed over the popular responses to Instagram’s critics. Of course Instagram can do what it likes with your photos, they sneered—as though it were foolish to have ever thought otherwise. The fact of the matter is that social media is an exchange ruled by an informal and usually unspoken contract. Terms of Service agreements often dance around it or bury it under euphemistic headings like “Rights.” The scrupulous silence around that tacit agreement fosters confusion about the motives that drive social media businesses like Instagram, even in people who usually know better.

The exchange is this: they help you interact with friends, family, colleagues, celebrities—as well as strangers who might one day become any of the four—on the premise that if the company tries hard enough, they can find a way to turn a profit from those interactions. That’s the catch: not “profit,” but profiting specifically from those interactions. The promise of the entire industry is that they can provide advertisers with surer methods for reaching consumers than were possible in boring old print and TV. So it’s not enough for Facebook to put ads on their pages—they’re actively looking for ways to convert your likes and posts into better targeting or viral advertising. That’s why social media Terms of Service are constantly changing, often surreptitiously and usually in ways that make at least part of the user base anxious.

What Systrom might have said, and did not, was that the Terms of Service as they were written might have actually been good for Instagram. A handful of users had already publicly and peevishly deleted their accounts, and it’s probable that more would have followed. The question is, would there have been enough dissenters to tilt the ledger? If the past is any guide, probably not. Systrom was unexpectedly frank about needing some way to generate revenue, but the deeper truth of the social media contract remained coded in the suggestion that they would continue to “experiment with innovative advertising.”

We are rapidly approaching the point where the reluctance of companies like Instagram to acknowledge the unspoken contract of social media is detrimental to both sides. If the industry is going to survive, the conceptual wall between ads and interactions must be broken down. To pay the costs of keeping a social network alive, they will ultimately be forced to not merely host those interactions, but to sell them as well. If you find that off-putting or consider that a violation, then you should delete your account. At some point, Systrom or someone like him is going to have to come right out and say so.


is the founder and editor-in-chief of Culture Ramp.
— Please submit all corrections, responses and rebuttals as letters to the editor.