Instagram: a lesson in trust

Instagram saw its popularity plummet at the end of 2012, as outraged users launched an online backlash over the photo-sharing site’s new privacy policy and terms of service. In the week following the release of its planned policy changes the number of daily Instagram users fell by 3.5 million, according to audience tracker AppData.com. Instagram has disputed these figures, stating that it is seeing growth in user numbers and started releasing monthly active user data in January 2013 to prove it. However, the fact remains that the brand lost social capital as a result.

The new policy (which has since been amended) came into effect on 19 January 2013 caused quite a stir when the original wording implied that Instagram would have the right to sell users’ photos to advertisers. Described by TechCrunch as a case study in tech PR blundering, the policy changes serves as a cautionary tale not just for social networking sites but all businesses. It underlines the value of consumer trust – how difficult it is to earn it in the first place and how easily it can be lost. So where did Instagram go wrong and how can businesses avoid similar costly mistakes?

Always have a clear, transparent privacy policy
People are fearful of change especially when it comes to privacy policies. Instagram, which Facebook bought for $1bn in April 2012, spooked its 100+ million plus members by using confusing legalese to update its terms of service to cover future monetisation strategies:

“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.”

Instagram users interpreted this as the photo-sharing site claiming the right to sell their images to advertisers without paying them for the right to do so.

Let customers adjust their privacy settings
Instagram went on to say: “by accessing or using the Instagram website, the Instagram service, or any applications (including mobile applications) made available by Instagram (together, the “Service”), however accessed, you agree to be bound by these terms of use.”

This left users no choice but to agree to the new terms or leave. They couldn’t adjust their settings if they didn’t want their photos to be used in this way.

To be fair, Instagram moved quickly to repair the damage. Co-founder, Kevin Systrom issued a public apology and promised to notify members of any future changes in advance. “I want to be really clear: Instagram has no intention of selling your photos, and we never did. We don’t own your photos – you do… We are working on updated language in the terms to make sure this is clear.”

But it was too late. Blog posts and news sites were fanning the flames: “you now work for Instagram… personal data to be used for corporate money-making”. Instagram had provoked a mass rebellion online.

People no longer trusted the brand with their data or their property. And once people lose trust in a brand over its use of their data it's a struggle to get it back.

Instagram announced the changes to its terms of service in a short, ambiguous blog post. It was only after the public outcry that it published a detailed, apologetic blog post about its intentions and removing the most unpopular clauses.

Instagram has since taken steps to repair the damage done. It sent an email a few days before the amended privacy policy came into effect, reiterating that nothing had changed with regards to the ownership of users’ photos or who could see them. And to make sure there was no confusion, an Instagram blog stated in clear language the main changes in its updated privacy policy.

Be clear about any changes from the outset
Mobile check-in service Foursquare emailed its users at the end of December to tell them about changes to its privacy policy, which came into effect on 28 January. It informed users that it would show their full names across the service and share more data with businesses. Foursquare gave people the option to opt out of both changes in the settings menu and used clear language to explain the changes.

“If you search for a friend on Foursquare, we show their full name in the results, but when you click through to their profile page you don't see their last name. We get emails every day saying that it's now confusing.”

“Currently, a business using Foursquare (like your corner coffee shop) can see the customers who have checked in in the last three hours (in addition to the most recent and their most loyal visitors). This is great for helping store owners identify their customers and give them more personal service or offers. But a lot of businesses only have time to log in at the end of the day to look at it. So, with this change, we're going to be showing them more of those recent check-ins, instead of just three hours worth.”

Foursquare also gave users the option to read an easy version of its privacy policy,Privacy 101. It sets out in plain language exactly what Foursquare does with data users have submitted. So far, it has worked with no sign of the backlash Instagram faced following its announcement. Meanwhile, Instagram is still reeling from the after-effects of December’s uproar and is even facing a lawsuit from one of its users for breach of contract and other claims.

If you are thinking about amending your existing privacy policy or creating a new one then the Information Commissioner’s Office has produced a good Privacy Notices Code of Practice.

DMA members can also contact the DMA Legal Team at legaladvice@dma.org.uk or by calling 020 7291 3360.

James Milligan, Solicitor, The Direct Marketing Association