Fred Wilson has a post today entitled "It's Time To Open Up The Feeds To Marketers".  In it  he says the online experience is increasingly being built around "feeds" like the one found in Facebook and that marketers should be allowed to exploit that for highly targeted Ads.  He further believes these marketers won't want to do business with each individual feed provider which opens an opportunity for a company to step in and be an "Ad broker". 

Here's a quote from Mr. Wilson...

So what we need to happen is the web services that render these feeds for us; google reader, netvibes, friendfeed, twitter, outside.in, facebook, etc, etc need to provide api accesss to these feeds to services that will serve marketers who want to get their messages targeted into them.

The targeting is the key and I am not entirely clear how this should work. In the case of search driven feeds, it should clearly be keyword based. In the case of geo feeds like outside.in, it should be zip code or neighborhood based. In the case of things like facebook or google reader, I think the targeting is more likely to be behavioral.

Mr. Wilson concludes his post by saying his venture firm would be interested in funding a company that provided such a service. 

Here's the thing, if someone really wants to try this than more power to you.  But in my opinion, it's a waste of time and resources.  Here's why...

The inherent problem is that both the Feed Generator (Facebook, Twitter, whomever) and the Advertisement Provider have conflicting interests.

These "feeds" that Mr. Wilson refers to aren't like web pages that use Adsense.  They often contain very personal information and because of that they represent a trust between a feed generating service and the people who use that service.

Handing that personal information over to a 3rd party ad provider would certainly be a violation of that trust (as has already been proven).

That brings you to the Ad provider.  They could, in theory, allow the feed generator to submit just the information needed to customize ads.  Then an ad could be created based on that info.  But in doing so they'd have to trust the Feed Generator to provide accurate information which puts a huge question mark on their service.

How effective can a service that tailors Ads be if that service doesn't control a vital part of their process?  More to the point, how can they hope to sell Ad space if they can't guarantee a certain level of accuracy?

It becomes a no win situation in the end.  Either the feed provider has to compromise privacy or the Ad provider has to compromise effectiveness. 

In my opinion this is a situation where people are turning to tech for a solution that business people are more qualified to solve.  Better to let each feed provider control their own Ad policy and allow advertising firms to sell that space in various packages (like is done with Print, Radio and TV now).  Then would be advertisers still wouldn't have to deal with every provider.

I love tech but it isn't necessarily the solution to everything.

For the Record...If I was going to do this (try to be an Ad Provider) I'd probably make a Javascript library that could be given to the Feed Generators to run internally.  That way they could run it themselves and not have to compromise their user's privacy while still using my algorithm to generate the results on which ads would be based.  With that said, this approach still leaves a question mark (since the process can't be verified by the Ad provider) and forces the Ad provider to give key Intellectual Property to their customers (who could then pick it apart if they so desire). 

For those who don't remember, Facebook's Beacon was an advertisement service created by Facebook that kept track of user's online activities and then used them to sell products (violating all kinds of privacy along the way).  Facebook users understandably objected and the idea was shelved.

Or so we thought...

Tom Kincaid, a top Facebook developer and blogger mentioned in the Facebook Developer Forums last night that Beacon seems to be rearing its ugly head once again.

According to Kincaid, he signed up for CBS Sportsline and got a Beacon-like pop-up, which he thinks may have used a Facebook cookie.

“I signed up on CBS Sportsline and joined fantasy football,” he wrote on the forum. “I got a pop-up on the bottom right. It looks like the old beacon stuff. I thought that didn’t work anymore, but it published a story to the homepage. I didn’t go through any kind of connect log in, it must have used the Facebook cookie somehow.”

I have to admit a bias here.  I've never been a fan of "free" applications like Facebook.  I like paying money for stuff.  I know it sounds antithetical, but I do. 

Here's why...

When something is free people tend to go with the attitude of "why question a good thing?"  Which would be great if anything was actually free.  But...

Nothing is really for free.

You have to pay for everything in life...Somehow.  Sometimes that's with Ads, sometimes it's with fees, and sometimes it's by more nefarious means.  But in the end nothing comes for free. 

That's why I appreciate paying for stuff.  There's no ambiguity.  You ask for some money, I give you some money, we're done. 

The exact opposite of that situation is what's going on with Facebook.  Facebook doesn't know how to make money.  They can't survive an attempt to charge a fee and they can't seem to make traditional ads work.  So now they need to make money but can't seem to do it in a traditional way. 

Enter the aforementioned "more nefarious means"

We don't know to what extent Facebook is bringing the original Beacon concepts back but I can almost guarantee you things will get worse as time goes along.  The longer Facebook can't find a way to make money the more it gets into the "wounded animal trying to survive by any means necessary" mentality.  That means looking for value in everything they have, including data collected from their users.

Facebook will not close it's doors just to protect their user's privacy.

What they will do is push every boundary of privacy until they find a way to save themselves.  The question of how much they violate your privacy will be decided by how far they have to go to make a profit.  That means every Facebook user is left with a big question mark as to what they'll eventually end up paying for the service. 

I don't know about you, but had I known the cost of Facebook might be playing Russian Roulette with my privacy, I probably would have just given them a little money instead. 

Well, I guess this is my moment of weakness coming back to haunt me.  I've gotten several e-mails on my Carly Fiorina post (I think it might have accidentally gotten onto the Huffington Post since they post Google Blog Search items apparently). 

The e-mails look something like this.

You are completely wrong [on your post].  That's not what Carly Fiorina said and her actual quote wasn't trying to insult Palin at all.

The whole quotes was this.

“I don’t think John McCain could run a major corporation. I don’t think Barack Obama could run a major corporation. I don’t think Joe Biden could run a major corporation. But on the other hand a major corporation is not the same as being the president or vice president of the United States,” Fiorina said.

“It is a fallacy to suggest that the country is like a company. So of course to run a business you have to have a lifetime of experience in business, but that’s not what Sarah Palin, John McCain, Joe Biden or Barack Obama are doing,”

So she wasn't saying Palin was incompetent she was saying she didn't think any of the candidates could run a company.  Next time try to know what your talking about!

Well, ok.  I posted this for accuracy but let me explain something (since the people who are sending these e-mails obviously aren't readers of this blog). 

I don't post on the actual politics of things.  I will sometimes post on political strategy but I make very sure to leave any discussion on actual candidates and issues out of my posts.  I don't believe that stuff has a place here. 

So Governor Palin wasn't my point. 

My post was focused on Carly Fiorina.  My point with that post was (a) I don't like her (Fiorina not Palin) and (b) she's SO arrogant that she sacrificed her role in the campaign to make herself look big ("oh, I ran a corporation, but they couldn't").  So the fact that she also said McCain, Obama and Biden couldn't do it just bolsters my point: That she's arrogant to the point of incompetence. 

'nuff said.