Instagram itself does something comparable:
> By displaying or publishing ("posting") any Content on or through the Instagram Services, you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, worldwide, limited license to use, modify, delete from, add to, publicly perform, publicly display, reproduce and translate such Content, including without limitation distributing part or all of the Site in any media formats through any media channels, except Content not shared publicly ("private") will not be distributed outside the Instagram Services.
Both Prince and Instagram are protected by U.S. law.
Ads are part of public spaces. Appropriating them into artworks is a pretty interesting thing to do, though of course the ad photographer union (so to speak) will oppose it.