User outrage prompted Instagram to revert to its original terms of service regarding advertising, but is Instagram's retreat good for you? Not necessarily.
In fact, Instagram's older terms are more liberal than the newer version it wanted to implement. The older terms could give the company just as much license to control your content as before.
How we got here
It all started when Instagram wanted to insert this language into its terms of service scheduled to take effect in mid-January:
"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."
This was not, as some news outlets suggested, about turning Instagram into a stock image clearing house where your Instagram photos end up being used in commercials and magazines. As Nilay Patel of The Verge, a former lawyer, argued, Instagram only wanted the right to display your photo in connection with paid or sponsored content. It couldn't create something new, like a newspaper ad, because that would be considered modification of your photo, something Instagram wasn't licensed to do.
What the company could do under the proposed terms, however, was take your photo and insert it into an ad. So if you took a shot of the Eiffel tower, the French tourism ministry could pay Instagram to insert your shot into a "visit Paris" ad. Instagram later said it had no plans to create ads out of user photos, which was a little surprising. Then again, for that kind of model to work, the company would likely need automated computer systems capable of identifying subjects in a photo, like a Coke can, and then figuring out how to turn that photo into an ad.
Instagram instead says it wants to create a revenue model "where both users and brands alike may promote their photos & accounts."
So, to quell user concerns, Instagram is going back to its old terms of service in regard to advertising. These are the same terms that users have been content with since the service debuted in late 2010. Instagram's updated terms, along with the original language about advertising, go into effect on January 19, 2013.
Here's what those terms say under "Rights" section 2: "You hereby 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."
That's a far more vague set of terms and says that Instagram can slaps ads "on, about, or in conjunction with" your content if it wants to. So how much has changed with this reversion? Not much, from where I'm sitting. Instagram's advertising terms seem far broader under this policy than they did under the proposal that engendered such a huge backlash. If it wanted to, Instagram could still use your content for advertising under the new terms, although the company says it doesn't want to do that.
The terms also still say under "Rights" section 3 that it could create ads and insert them in your stream without calling them ads. "You acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such," the revised Instagram terms say.
Instagram was recently bought by Facebook for an estimated $1 billion in cash and stock. The world's largest social network wants a return on its investment and the easiest way to do that is to show ads to Instagram's users.
Judging from its recent statements, Instagram looks set to introduce ads that are sponsored posts, similar to the way you see Facebook posts from brands appear in your news feed, even if you haven't liked that brand. Instagram may also apply the nickel-and-dime approach that Facebook is playing with, when you can pay a small fee to ensure all your followers see a recently posted photo.
It's not clear when advertising will show up in Instagram, but rest assured it's coming. And now, the photo-sharing network has a liberal license to treat your content as it sees fit in relation to ads.