SmartMoney Blogs

Real-Time Advice
Our real-time advice on how market shifts and news impact you and your money

With Instagram, Facebook Gets ‘Holy Grail’ of Data

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

Getty Images

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 Reputation.com. 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.)

Also See:

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.”


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 11)

View all Comments »
    • Consumers don’t want Flash – they want the content it diylpass. Another medium with similar content would be fine as long as people get their video & game fix. Which is why JavaScript, HTML5, etc. will do fine. As for the lack of Flash bringing down Apple as some have ludicrously suggested, the iPhone & iPod Touch have never had Flash, and they’re both doing pretty well the last time I checked. So if you want Flash, don’t buy an iPhone, iPad or iPod Touch. No one’s forcing you. Just as Apple is free to build their machines the way they want, and Adobe is free to develop Flash the way it wants.

    • “Minimum wage is so overrated. Try lniivg on the minimum wage in Sydney and see how far that gets you.”It’s an incredibly insensitive comment. I’ve never seen an Australian working full time who can’t afford to have a beer on a friday afternoon.In Singapore there are people who work seven days a week and get paid under $1000/month. With no OH&S, no sick pay, no opportunities for career advancement or further education, no job security and DEFINITELY no holidays.Minimum wage in Australia gets you so, so, so much further that it’s not even worth comparing.

    • Chris oh, I agree. I’ve been sitting on a faliry pissy blog post dedicated to those people over the years who have bizarrely slighted her accomplishments. Cooler heads have mostly prevailed. Mostly!But we’ve been excited!

    • Hey Paul, before you correct others on their spelling you might want to check your own. There is no such word as “spelt”.

    • Hey Paul, before you correct others on theier spelling you might want to check your own. There is no such word as “spelt”.

About Real-Time Advice

  • How breaking news — in the markets, Washington, and around the world — affects you and your money. Have a question about how current events may change your financial future? Email us at ask@smartmoney.com.