Instagram Direct: Your data, direct to marketers

In an interesting marketing play, Instagram announced last week that it would offer a new service, to be called Instagram Direct, allowing its users to send messages and images to small subsets of their friends and families. At a news conference, Instagram CEO Kevin Systrom tied the rollout to the season, saying, "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 be getting quite a Santa sack full of personal information about you and your friends.

The dirty, not-so-secret secret about social networks is that they are really all about how much data they can collect from users, data that is analyzed and then used to send increasingly personalized sales pitches. (Kind of gives "Secret Santa" a whole new meaning.) And this Instagram service rests, not coincidentally, on the two mother lodes of shopping data: 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 Wal-Mart, 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 one consumer, how would you like to be able to send highly customized pitches to his or her close friends and relatives?

"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 item 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."

The potential of this sort of thing was hardly lost on Wal-Mart, 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." Pharmaceutical companies 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 Wal-Mart, Johnson & Johnson and the used-car dealership down the street.

But pictures can say a lot more than all of that. Unless the consumer takes the time to strip the photos of their metatags, smartphone pictures also reveal the exact time and place they were shot. Let's say that a consumer who lives in Atlanta shares a new photo with a friend, but the photo's metatags show that she's currently in Denver. It being 6:30 p.m. there, her favorite restaurant chain sends her a text, directing her to a store just five minutes away and offering 20% off if she shows up within 30 minutes.

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

This all brings us back to Instagram Direct and helps remind us why Facebook dropped a billion dollars last year to buy the company. 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 what 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 in to Christmas, I'll 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."

Evan Schuman has covered IT issues for a lot longer than he'll ever admit. The founding editor of retail technology site StorefrontBacktalk, he's been a columnist for CBSNews.com, RetailWeek and eWeek. Evan can be reached at eschuman@thecontentfirm.com. Look for his column every Tuesday.

Read more about privacy in Computerworld's Privacy Topic Center.