Instagram Direct: A Clever Way To Direct A Lot More Consumer Data To Marketers

Written by Evan Schuman
December 17th, 2013
In an interesting marketing play, Instagram on Thursday (Dec. 12) announced that it would offer a new service—to be called Instagram Direct—where its users could send messages and images to small subsets of their friends and families. At the news conference, Instagram CEO Kevin Systrom tied the rollout to the holiday, saying "As we as we enter into the holidays, it's a perfect time to be able to share with a small group or someone you love." That's true, as long as the someone you love includes marketers who will getting quite a Santa sack full of personal information about you and your friends.

The dirty not-so-secret secret with all of these social programs is it's always been about how much data can be collected from consumers, to be turned around and used to send increasingly personalized sales pitches. (Kind of gives Secret Santa a whole new meaning.) The two motherloads of shopping data are not-coincidentally both involved in this Instagram deal: photographs (and their associated metadata) and relationship connections.

Why relationship connections? If you're a consumer goods manufacturer (think Toyota, Nike, Nabisco, Sony), a retailer (think Walmart, Macy's, Target, Amazon) or a marketing firm (think Genghis Kahn, Idi Amin, Mussolini), how much is it worth to you to know which consumers are close friends or close relatives with other specific consumers? As a major gift-giving occasion comes up for the first consumer, how would you like to be able to send highly-customized pitches to those people who are close friends/relatives of that consumer?

"Hey, we know that you're good friends with Suzy and it's her birthday next week. As it happens, we also know that she's been looking at a certain $9,000 diamond necklace on our site. Here's a link to purchase and send it to her. Her address has already been filled in, along with instructions to the shipper that it must arrive on her birthday and not before. If you're as good a friend as Suzy thinks you are, all you have to do is type in your credit card data." This fact was hardly lost on Walmart, which paid substantial dollars to buy a small Facebook app called Social Calendar.

Why are photographs such huge data finds? As mentioned above, the sharing act itself provides super-valuable data on relationships, but the photos tell quite a bit. What the photograph depicts indicates things of interest to both the shooter and the recipient. Is it a friend playing basketball? Nike wants to know. Maybe a meadow, along with a text note that says "Ellen couldn't stop sneezing." Pharmaceuticals really want to know.

And, yes, Instagram is encouraging people to text away right next to these images. That's to help their friends put the images into context. Friends like Walmart, Johnson & Johnson and the used-car dealership down the street.

The smartphone-shot photos also reveal the exact time and place the photo was shot. Let's say that this consumer lives in Atlanta but the photo's metatags shows that she's right now in Denver and it's 6:30 PM. How about a text from her favorite restaurant chain, telling her that they have a store just five minutes away from where she is right now and here's a 20 percent off coupon if she shows up within 30 minutes?

The fact that smartphone photos reveal so much has actually caused various startups to launch, companies that will offer almost anything to get you to send your photographs.

This all brings us back to Instagram Direct and helps to remind us all why Facebook dropped a billion dollars last year to buy them. If anyone understands monetizing online ventures—and the value of both digital images and relationship connections—it's Mark Zuckerberg.

Note, for example, Instagram's post-Facebook-acquisition privacy page. I'll save you some time. It essentially says "If we see it, we can sell it." Third-party advertising partners—and, of course, anyone at Facebook—are among those who are allowed to see whatever Facebook chooses to share.

Many consumers claim that they are concerned about privacy and limiting who knows much information about them. And yet, as they participate in more of these programs, they unwittingly are sharing—and giving permission to share further—a huge amount about their lives. Once the data is out there, it can never be retrieved.

But given that the Instagram CEO tied this into Christmas, I offer an updated version of a familiar classic.

'Twas the night before Christmas,
When back at Facebook,
Every VP was smiling… at the data they took.
The users were linked, by the friends that they chose,
In hopes they'd be buying toasters and clothes.
The targets were nestled all snug in spreadsheets
While visions of bonuses went to social elites
And IT took that data, grabbed from photographs,
And shared it with Zuckerberg, who smiles and laughs.
I then heard him explain, just a bit Machiavellian,
"It's not really Christmas if we can't be Orwellian."