This is reportedly the fastest growing social app out there. On the Google Play Store it is described as: Share your photos and videos with friends and followers in a photo feed, or send posts directly to your friends. Instagram is the clear leader in photos and video captured with mobile devices. There is more to it. But, that is the basic idea. It is a free service. Or is it?
Do you remember those apps that used to say free, just give us your email address? If you did, you suddenly found yourself inundated with email spam. How does Instagram pay for the servers and bandwidth to handle 150 million plus users? Why are the Facebook owners willing to pay US$1 billion to buy a company run by a dozen or so employees? (Reference)
For that matter how does Facebook make its money? There is the on-site advertising. Those ads along the right side of the page. Google does something similar. I have Google Ads on this site. They pay for the web site and most of my Internet connection cost. But, is Facebook/Instagram going to make $500+ million per year and up just displaying page ads?
In 2011 85% of their money came from selling advertising. 15% came from ‘payments’. (Reference) Some portion of those ‘payments’ come from phone service providers. AT&T and Verizon need something for you to burn up those data plans. But, how much money is there in those channels?
In 2012 the money spent just in the USA on advertising was $139.5 billion. TV, radio, magazines, newspapers, and web properties are all competing for that money. 90% of companies now advertise in social/web media. But, what makes one company better than another? Why would you spend you ad dollars with a specific company? The deciding factor is whether the ads work or not. Do the ads increase sales?
One of the major tricks in advertising is being able to target the ads at the likely buyers of a product. You need laundry soap today? Then there are soap makers that want you to see their ad today. With social media the information to do that is available. If you read Data Collection in Second Life Bits and Pieces 2014-4 and wondered how Amazon could possibly predict what you will buy, here is part of the answer.
Internet ads have been to anonymous viewers. With social media, that has changed. They no longer are limited to trying to track you by an anonymous IP Address. Now they are tying your cell phone to your IP Address. They can target you whenever you are online no matter which device you use.
You can test this tracking thing. Notice the ads on my site. Now, search Google and Yahoo for Dragon Naturally Speaking. Then next time you are on my site notice how the ads have changed. I use Dragon and after looking for the best price, I saw Dragon ads wherever I browsed.
Knowing who you are and where you are is valuable marketing information. Just as companies used to sell, and still do, your email address, they now have much more information about you to sell to marketers. Getting the ads to the right people at the right time makes for effective ads. People will buy what they need/want and can be influenced by ads.
The result is we pay for these services by giving up our personal information. Is that safe or wise?
Target just lost 100+ million customers’ credit card information. (Reference) The Obamacare web site was reported as unsafe by seven different security companies with four testifying under oath in Congressional hearing in January. (Reference, reference, reference, House Committee SS&T, transcripts) We have many cases of misuse of information by numerous people and groups, including government and it is growing.
The permissions list I show in the image is scary enough. Read the details by touching the items, in your phone not here. Send the people making these apps and they will tell you they don’t collect that information… but, you are giving them permission to do that.