Image sources: Grave, Wikipedia. Instagram logo: Asbury & Asbury; see their blog on the Instagram PR crisis.
The Instagram brand is dead. Let's stop and accept this.
Why is the Instagram brand dead? If you don't understand this you are missing the point.
Basically they touched on a fear that people have been avoiding. Which is that they are putting too much personal stuff on the web, and that someone will use it in a way they don't like without their permission.
I can't figure out who would have been so incredibly stupid as to change the terms of service in the first place so that people's personal images could be used for advertisers!
I had to read this twice before I believed it: (screenshot via CNNMoney)
"A business or other entity may pay" Instagram to display users' photos and other details "in connection with paid or sponsored content or promotions, without any compensation to you."
They really thought people were going to sit back and ignore the fact that their photos could be used by sponsors? With no compensation? Minors included?
Without going into all the obvious reasons why such a policy would have been ridiculous, I do want to point out that the "backtracking" will have absolutely no effect.
Why is this?
Imagine that you allowed somebody into your home as a guest. They stayed in a spare bedroom, ate dinner with you and your family, watched TV in your living room, and accompanied you on family trips.
That is Instagram. Not a part of your family, but nice enough and you let them in.
Now imagine that this same person waited till you went away, then invited ten of their friends to come over and par-tay. All night. Drinking your drinks, eating your food, sitting all over your furniture.
You come home in mid-vacation and you find your "guest" and their "friends" taking advantage of your hospitality.
Would ANY apology from this person suffice? Would you ever want to see them again?
This is the dilemma that Instagram now finds itself in. They have trespassed on the generosity of their users, who were the basis of the brand, who were the reason that its relatively insignificant benefits became valuable.
Instagram messed with its social network.
It's the reason no amount of words will help now, and they should shut the doors and start all over again. Avoiding all issues associated with the negative brand equity surrounding the original name.