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Brittany Williams

on 29 April 2013

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Transcript of Instagram

Milena Flament Rising Popularity Business Design: Free Photo Sharing App Instagram's development Facebook
for $1 billion in cash Facebook: Brett DeLoach, Ryan Harris,
Lindsey Ingle, Kaley Moore,
& Brittany Williams Founded in 2010 by The Privacy Policy Controversy Privacy Issues: Arguments
& Concerns The Issues The New Privacy Policy Bridging the gap...

Legal and ethical, and now addressing the economical portion: Advertising. Out with the old, In with the New User & Instagram Response Users'
Reactions Instagram
Response Current Dilemma, Recommendations & Discussion Users were outraged by the change in policy which resulted in daily user loses... .. But was it resolved? Brett DeLoach, Ryan Harris, Lindsey Ingle, Kaley Moore, & Brittany Williams The Privacy Policy Controversy Instagram: How is $1 billion dollars justifiable for a zero revenue company? They need to make changes in order for Instagram to generate massive amounts of revenue to support their high valuation. But how?

A big potential solution: Advertising. the chosen action... Sustainability
& Issues
Management Today Supporting Arguments Counter Arguments Share information about its users with Facebook, its parent company, as well as third parties including outside affiliates and advertisers
Star in an advertisement — without your knowledge, even underage users not exempt
This includes you and your photos
Ads may not be labeled as ads "New Intellectual Property Policy"
Has the perpetual right to sell users' photographs without payment or notification
Immunized from liability
"Instagram will not be liable for any use or disclosure of any content you provide." Kevin Systrom and Mike Krieger Launched October 2010

Designed the application for smartphones to filter and enhance photos, which can then be uploaded to various media sites and shared with family and friends Only 13 employees, housed in Twitter's old digs kept overhead costs low Founders settled on the name "Instagram," a portmanteau of "instant" and "telegram," and "it also sounded camera-y," according to Systrom. Interface stayed junk-free (image standalone) and kept creep vibe low while focusing on building community user base and functionality
Valuable new data set created by the app - this rich data could potentially be monetized Unconcerned with making money during its 15-month independent lifespan to focus on improving the app better "Imagine, you have a cute picture of your child running on the beach in Hawaii at a popular hotel. That hotel sees the pic, buys it from FB (Instagrams owner) and now your child/children are on a national ad campaign that you did not agree to, and you receive zero compensation. AND you have no choice. I'm deleting my account after I post this

Facebook can soon sell your Instagram pictures without your consent or payment. Time to move to Google+

See ya, Instagram. #delete"

- A real Facebook post in the personal news feed of a reporter for NY Magazine, Kevin Roose Instagram collaborated with Facebook' on ways to share insights and information with each other so they could build better experiences for their users. Instagram claimed that the privacy policy update was apart of this collaboration. Others questioned it. One of the important segments of the new policy: "Some or all of the Service may be supported by advertising revenue. 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. If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to this provision (and the use of your name, likeness, username, and/or photos (along with any associated metadata)) on your behalf." Instagram's Information Gathering: - Directly provided information (username, password,
email, profile info, all content and communications
including photos, comments, and likes)
- Friend information (direct searches, from your
contacts, and third party social media sites)
- Analytics information (traffic and usage trends)
- Cookies and similar technologies (how you use it)
- Log file information (each time you visit a page)
- Device identifiers (may be installed on your phone)
- Metadata (geotags, hashtags, comments, other
data that makes content more searchable) Threats to Sustainability &
Potential Alternatives for Users: flickr
pixlr-o-matic Initial Position in CSR Pyramid Philanthropic Ethical Legal Economic So far, ethical and legal but not
economic or philanthropic. Need to meet the economic component in order to sustain the business. Want to opt out? Delete your account. In the 4 days following the policy change announcement, average daily users fell from 16.4 million to 12.4 million

New flickr app (owned by Yahoo) offers same benefits as Instagram

Twitter now has photo filter features

Tadaa works similarly with photo editing features and social media sharing capabilities

Overall, there are various photo sharing apps that offer many of the same benefits as Instagram - this is a big threat Facebook
Facebook shareholders
Facebook users
Instagram users
People in pictures on Instagram
Potential advertisers
Competitors (flickr, etc)
Instagram and Facebook employees
Parents of underage instagram users
Media Stakeholders Issues Management ... Instagram listened & responded. Poll by USA Today asked users if they would keep using Instagram if they kept the new terms....
67% said NO. It isn't me,
it's you. Dear Instagram,
Old Friend... The changes to the policy were announced on December 16th, 2012. The media attention and user outrage pressured Instagram to respond, which they did on December 18th, 2012 via a letter from co-founder Kevin Systrom. "Since making these changes, we’ve heard loud and clear that many users are confused and upset about what the changes mean." "I am grateful to everyone for their feedback and that we have a community that cares so much. We need to be clear about changes we make — this is our responsibility to you. One of the main reasons these documents don’t take effect immediately, but instead 30 days from now, is that we wanted to make sure you had an opportunity to raise any concerns. You’ve done that and are doing that, and that will help us provide the clarity you deserve." On Advertising:

"To be clear: it is not our intention to sell your photos."

"The language we proposed also raised question about whether your photos can be part of an advertisement. We do not have plans for anything like this and because of that we’re going to remove the language that raised the question." On Ownership Rights: "Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed." On Privacy: "Nothing has changed about the control you have over who can see your photos." Thank You & We're Listening The new policies were implemented on January 19th, 2013
- However, the advertising section was reverted back to the original policy in October 2010 when Instagram launched.

They still have the right to change their policies at any time.

In the future, they stated that they will complete their advertising plans, and rather than ask for permission, they will explain how it will work. Decision & Today's Policies This dilemma still does not have a clear solution for all of the stakeholders.
The users are generally satisfied with the current policies, although they are still filled with legal jargon which results in a lack of clarity. Users are also more aware of the fact their rights could easily be violated.
However, it is still a zero-revenue company, owned by Facebook, that needs to meet economic components of CSR.
Facebook still needs to validate their $1B price tag for Instagram
FB shareholders need to see revenue and profits - Needs to become profitable
and self-sustaining by generating revenue

- Created to become a business

-Want to avoid banners to preserve
the user experience, which calls
for looking at new ways
to generte revenue - Advertising is not the sole source of potential revenue, but can be very profitable Example: If a company wanted to promote themselves, Instagram may be able to feature them. To better target people, they may show people whom they already follow that also follow this company (meaning that your personal account and data could show up) - Instagram is not directly claiming
ownership over user content

- Claim nothing has changed regarding
user controls on sharing and private photos

- Believes they can function more easily with Facebook by sharing information

- This includes fighting spam more effectively, detecting system and reliability problems more quickly and building better features by better understanding how Instagram is used - Social Media is an oxymoron
when it comes to privacy,
because there is none on the internet

- Facebook already has your photos
because their policy is just like this new one at Instagram.

“For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us ... a non-exclusive, transferable, sub-licensable,
royalty-free, worldwide license to
use any IP content that you post." - People: Your photos
aren't that interesting
- Billions of photos on Instagram,
so the odds of yours being used are slim

- Celebrities likely more at risk:
Who would you rather have, LeBron or average Joe?

-Users are given an option to leave and keep copyrights
- Users have time to make a decision

- All an attempt to maintain
free use of the service This definitely was an ethical issue for Instagram
Terms were not clearly defined
Issues with conflicting values and interests
No automatic or obvious solution
Inherent tradeoffs
Value-laden terms present

This issue was very likely to affect the organization considering the falling daily user numbers
This issue clearly had major impacts on Instagram, primarily because the areas of potential value rely on the user base Dilemma:

Keep users happy
and remain at zero-revenue,
risk losing users to implement
policies that will facilitate
revenue generation? Do you think Instagram violated the ethical theory of Individualism—primarily seeking their own interests? Would you consider Instagram’s actions to be more duty-based (Deontological) or results-based (Teleological)? More specifically which ethical principal would their actions fall under? First and foremost, we would recommend that Instagram adopts a transparency policy when communicating with its users.

Establishing and maintaining trust will be important in preserving the number of users and maintaining public image. Users need an understanding of what their personal data is being used for and what their rights are when using the service. Implement advertising simply without displaying various user data. Use personal data to target what ads may be most appealing to each individual instead, and do not share user data or content outside specified boundaries. Preserving rights will help Instagram to maintain integrity. To supplement advertising data, perhaps charge a one-time fee for creating an account or for downloading the app rather than monthly charges. Revenue will be limited to new customers, but it does add a new way to make revenues. Additionally, existing users could be given the option to pay a fee in order to protect their content from Instagram's free content use and
info sharing. Clearly, there are multiple ways for
Instagram to generate revenues, and it can
be done without sacrificing the
user experience or user content.

The big things we recommend overall would be open and clear communication with users and shareholders, ongoing awareness of legal ramifications through legal counsel, monitoring media coverage of changes, and allowing revenue alternatives to be chosen by users when they feel uncomfortable about advertising and privacy policies.

Exploring the new and innovative advertising
methods is definitely something we suggest, but
we stress the importance of considering
stakeholders and potential reactions. Users extremely unhappy & generating negative media attention

Articles on how to delete an account and alternatives popped up everywhere.

Threatened Instagram overall Violated users' privacy rights

Collect so much information, but users expect data to be kept relatively private and not given to third parties,

The trust established between Instagram and users was threatened, and when the user base is
threatened, it jeopardizes
the business. Celebrities could easily be used in advertisements, as could the photos of professional photographers who do this for a living. These two groups posed a serious threat, especially the former group, due to the publicity they can generate with their dissatisfaction. Using user content could potentially be illegal in some states according to legal analysts.

Violates IP rights primarily. There may be individuals in Instagram photos, like children, who would not approve of being used in an advertisement, etc.

Complete disregard of these people's rights as well. http://live.wsj.com/video/instagram-privacy-policy-angers-users/214A88E5-348E-4DCA-A01C-11D6B39DCC01.html#!214A88E5-348E-4DCA-A01C-11D6B39DCC01 WSJ Live Video - "Instagram Privacy Policy Angers Users"
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