Instagram’s terms of use may upset brands more than most users

Yesterday, Instagram (or was it, Facebook?) amended its terms of use, and the sticking point which has caused outcry among tech blogs, bloggers and celebrities reads as follows:

"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."

Some sites, such as CNET have taken this to mean that Instagram has “the right to sell users' photos without payment or notification” and the only way to opt out is to delete your Instagram account.  

Others, such as The Verge and Gizmodo clarified that the terms only allow Instagram to display photos and other information in connection with paid or sponsored content on Instagram, and the photos cannot be altered in any way.

Ironically, while the terms were updated to allow Instagram to “experiment with innovative advertising”, it seems that advertisers and brands are the parties Instagram runs the highest risk of alienating.  

Despite a swift apology from Instagram founder Kevin Systrom, National Geographic, which has more than 640,000 followers on Instagram, opted to suspend all activities with the latest post reading:

@NatGeo is suspending new posts to Instagram. We are very concerned with the direction of the proposed new terms of service and if they remain as presented we may close our account.

Nico Abbruzzese, head of digital Asia-Pacific for Maxus describes Instagram’s problem as a “case of overblown media stories” and has no plans to stop using the platform for advertising.

“What Instagram has done is simply update its policies to comply with a similar strategy to its mothership Facebook (i.e. content advertisement) exactly like social ads on Facebook,” he pointed out, adding he was surprised it hadn't made the move sooner.

Instagram’s real problem, said Abbruzzese, is that the updated terms were open to misinterpretation and could have been phrased and publicised with a great deal more tact.

"National Geographic better read the T&Cs properly, or take itself off Facebook, Twitter and the whole internet for that matter if they’re so afraid of content advertising," he added.

Other digital advertisers though, were more sympathetic of Nat Geo’s stance. Luke Eid, head of TBWA Hong Kong’s Digital Arts Network said even with Instagram’s apology, he would be concerned about posting any brand-owned content on the platform.

“Although they seem to be reeling back on those terms, until it's clearly in black and white, the current terms as they stand mean brands could possibly have their content poached and used by competitor brands if they pay a fee to Instagram,” said Eid.

While chances of this happening are unlikely, he continued, “it does leave a lot of marketers (and personal users) exposed. Until we have the revised terms in front of us we'll be reviewing the ongoing use of Instragram in any of our clients communications or campaigns.”

Eid’s concerns were echoed by Blugrapes lead consultant Natasha Zhao, who advised a “wait and see” approach for brands. “Users who use Instagram as a hobby or pastime are probably less affected than brands, who may fear that their images may be used in a competitor’s ads.”

Gregory Fortune, head of digital and client leader for Mindshare Singapore, conceded that Instagram needed to update its T&Cs for the sake of revenue. However, the policy it instituted is "too open" and grants Instagram "sweeping powers". 

Like Zhao, Fortune believes that while some may migrate to Flickr or other alternative photo-hosting services, the mass consumer will continue to remain loyal. 

"As an advertiser I would be nervous about running a campaign in the short term, but in most cases these T&C's are very similar to other websites and will only result in greater targeting and relevance for the users," he concluded.