Remember back in the day when a change to the legal terms of service of a popular online service really meant something meaningful?  No?  Yeah, I don’t either.

Remember the introduction of Edgerank; Facebook’s new algorithm that filters your posts from most of your “network” unless they receive a high level of engagement? Remember how furious consumers were last year when Facebook introduced Edgerank without asking us? Yeah, in just the last six months, the company has seen 300,000 business pages pay to promote posts. 25% of these are new advertisers to the site.

Oh, well then you must remember back in 2007 the huge privacy uproar of this new-fangled ad platform called Beacon from Facebook.  This new platform promised to use your information (including your “likes”) to target ads to you.  Well that’s a $6 Billion business for them today.

There are certainly other online services in that mix – including some of the biggest brands on the planet. In fact the ol’ switcheroo seems a rite of passage these days for any new online service. You can almost see the Justin Timberlake lookalike venture capitalist advising the new team: Step 1 – get a few million people to sign up for your service.  Step 2 – take a bucket of money.  Step 3 – monetize the user’s content, and expect some blowback.  But, it will pass. And, guess what?   It usually does.

Instagram’s TOS.  Strategy, Mistake or Both?

So, the recent fervor over Instagram’s terms of service change seems to have subsided. Reports that the service lost 25% of its user base are, with some perspective, greatly exaggerated.  And, I tend to agree with Geoff Livingston that those who feel the need to quite publicly tell the world “why they are leaving” should, you know, just leave. All in all, it’s just not that dramatic when any one micro-geek-celebrity leaves a social network. Guess what? Your mom and million of others didn’t.

In fact, despite the recent tempest, research would suggest that the Facebook brand is doing just fine. Every year, the marketing and advertising research firm Millward Brown does a study of the top 100 brands and their value across consumer trust, financial success and other factors. The latest 2012 “Brand Value” study showed that Facebook enjoyed the largest increase in brand value of their yearly top 100 brands, and is now in the top 20 of most valued global brands.

However, what I think has been missing from the conversation is the longer marketing and consumer engagement game here. It’s not the damage done (though over a much longer term you could argue this point).  Rather, the issue is how mismanaged content and marketing presents a huge missed opportunity to create deeper relationship with every customer.

Missed Opportunities

So, there’s a relatively well-known story about how almost three years ago P&G launched a new brand of Pampers. I won’t belabor the story here (and you can read about the marketing lessons here) but the gist of the story is that Pampers introduced an innovative new product. And, instead of marketing (or really doing much of anything in the way of communications) ahead of the launch, they simply “did stuff the old way” and put the new product in old packaging and sent it out.  As you might expect, a good percentage of the unsuspecting consumers we’re really annoyed with this new, different product being forced upon them.  And, when asked about this tactic, the VP of North American baby care at P&G said:

“Similar to our experience in the past, when you change things, without articulating what the change is about, you will get consumers who complain. All the data we have to date…..are that the complaints are well within what we were expecting and considerably lower than we’ve seen with some of our previous innovations.”

(bold: my emphasis)

This is the key: they were expecting to annoy people with this tactic.  And, apparently, this is a well-worn tactic in P&G product marketing.

Are New Companies Developing New Bad Habits

Did anyone at Facebook/Instagram really work to make sure this change was made in as smart a way as possible?  I would bet an expensive dinner that, no, it was not. And, even if I were to lose that bet – how many times have we, as marketers, been in this situation?  How many times does Legal, Sales, Product Development or Customer Service communicate something directly to customers that ultimately may benefit the business – but may or may not benefit our customers?  Just because it’s easy to enable non-technical people to publish content to the Web doesn’t mean we should make it so.

Online services like Facebook/Instagram may be taking a page out of an old product marketing book – but I absolutely believe that this is a new bad habit.  It is, in the short term, a huge missed opportunity – and ultimately opens the door for competitive differentiation (for us or someone who will disrupt us).

Consumer Trust Is A Differentiator.  Will It Be Yours?

Now, our consumer “outrage” meter may be tilted toward the silly scale when we really look at the issue of things like usage of our pictures of sunsets and pretty food without our consent.  But, what has fundamentally changed over the last few years is the consumer’s expectation of our brands and their ability to remember.  The power of Web search may or may not be making us more dumb, but it’s certainly giving consumers the power of infinite memory. The internet never forgets.

Consumer Trust is not “dependability”. Consumer Trust is an emotion that can deepen over time or be lost in a moment. As stewards of a brand, marketers have to continually and constantly build trust. It is extraordinarily hard to build these days – and it is fragile and precious.  And the only thing that enables us to build it is how carefully we manage our communications – our content.

ALL content is now marketing – and that includes a change in packaging, legal terms of service, our blog, and every customer service and store associate we employ. It’s hard enough to control employees to manage a consistent communication.  But when we cavalierly pull a content bait and switch to a brand promise, we have no one to blame for eroding trust but ourselves.

This is truly what we can learn from the Instagram/Facebook terms of service change.  Will the ham-fisted communication of change hurt Facebook’s ability to monetize the Instagram service in the short term?   No, absolutely not.  And, one might even argue that this was a planned strategy.  Their bet: this too shall pass.

But we should take the opportunity to ask ourselves, as marketers, if we can be better than that. Can we structure our communication processes more fluidly?  Can we use technology and restructure our strategy so that rather than building to scale – and remaining siloed – we rather build to lead, create systems of engagement and facilitate every changing conversation with our customers.

It’s a big job.  It’s a big change. Let’s go do it.