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With Instagram, Facebook Gets ‘Holy Grail’ of Data

Why did Facebook buy Instagram? Experts say it may be all about location, location, location… data.

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Snap a digital photo, and the file typically includes embedded information on where and when it was taken. Facebook says Instagram will remain a standalone app separate from the social networking site, but the acquisition could make it easier for marketers, advertisers and the apps and companies one “likes” to access that kind of photo information, says Deborah Mitchell, executive director for the Center of Brand and Product Management at the University of Wisconsin-Madison. Marketers could be presented with whole new world of data, she says – almost “like when Dorothy goes from Kansas to Oz. They’re getting a much richer picture of you and what you’re interested in.” Facebook, meanwhile, gets a bigger foothold on phones via the Instagram app, which could allow it to gain more access to the data on your device, says Michael Fertik, chief executive and founder of Like other personal information, that could be worth anywhere from $50 to $5,000 to marketers, he says. (Facebook declined to comment. “Given quiet period restrictions, we cannot provide any comment,” said a spokeswoman.)

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Experts said photographs on Facebook could be among the more valuable data on that scale. “That’s the holy grail,” says Scott Steinberg, chief executive of business consulting firm TechSavvy. “It tells them exactly where you are, and what activities you’re interested in.” Marketers can analyze the photo content itself for basic details like presence of children or pets as well as specifics like friends you tagged and what keywords you included in the caption, he says. That tells them what ads to send your way, improving the chances that you’ll click through. So, post a slew of candids of the baby and ads could start popping up for diapers. Repeatedly tag yourself in vacation photos, and airline credit card pitches may come your way.

Consumers may be able to control some of the information shared — personal data can often be removed from image files, and privacy settings on Facebook and Instagram can keep some images less visable. But users should consider anything they post potential marketing fodder, says Steinber. “It’s not always apparent just what data is being collected,” he says. “At the end of the day, you have to realize that on social networking sites, there’s someone looking over your shoulder at any given time.”


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