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A friend of mine lost his job last year, his mother was diagnosed with cancer and he had to fight off foreclosure threats. A very rough year. What did I see on his Facebook page? Motivational quotes, pictures of smiling people on the beach, pictures of home-cooked food. The occasional negative expression “That was a rough day.” with 5 ‘likes’ and 2 supportive comments of his social graph.

We live a 2.0 version of “The Stepford Wives” on Facebook. Everything is so colorful, so friendly, and so motivational. We’re all just friends, ‘liking’ everything we see and busy creating an identity outside of our real lives. Nobody reveals their real self on Facebook. Actually, nobody reveals their real self on Social Networks. We play a part in this theater we call Social Networking.

Have you ever seen anyone posting “Unemployed and looking for a job” on LinkedIn? Of course not, people are becoming consultants or come up with other fancy titles to protect their personal brand. Most people understand how to shield their real self from the outside and control their own brand.

Mark Zuckerberg’s declaration that privacy is dead, is just another sales pitch. Privacy is alive and kicking. It’s being redefined as we speak. Not from Facebook. Each one of us is redefining privacy. We select what to share. We select who to share it with. We define our own brand. And we like brands that bolster our image, give us more personal brand juice. I might watch each episode of “The Bachelor” and tune into “Charlie Rose” once a year. As a 40ish entrepreneur, what will I “Like” to protect my brand image?

The media industry loves to put people into boxes aka segments. Behavioral Targeting 1.0 promised to deliver relevant messages to targeted audiences. I’ve tested these campaigns for years and they never delivered on their promise. Facebook’s Behavioral Targeting 2.0 will fail even more miserably. At least, Behavioral Targeting 1.0 is based on real user behavior, amassing data about sites I visited, trying to find a common denominator (segments) and communicating with them through relevant messages. Facebook believes what people express in their social graph is what people really think, who they really are. And that my friend, is just not true.

As an industry, we have to come to grips that the end of advertising as we know it is near. Human beings are unpredictable. We don’t want to be put into boxes. We don’t want to be targets, segments, boxes. We are individuals. Most of the time, we don’t want to hear from advertisers. However, there are times when I can’t wait to hear from brands.

Imagine this scenario: I want to go to Europe with my wife for a week. London, Paris and Amsterdam. I want to fly non-stop , stay in 3+ star hotels, eat in one of the 50 best restaurants in the world, celebrate my wedding anniversary with a special evening and my budget is $5,000 for two. Currently, it will take me at least 20 hours to gather all the necessary information through branded sites, review sites and connection with my Social Graph. What do you think is more effective?

Scenario A: The first thing I decide on is a flight. I go to Bing, check out individual airlines (KLM, Virgin Atlantic, British Airways). I decide to go with Virgin Atlantic. Because I visited KLM and BA but didn’t convert, both brands will continue to message me even though my flight is booked and I’m not interested in any offers anymore.

Scenario B: I send out a personal RFP to the world, expressing my specific intent to travel to Europe, including all details mentioned above. Nobody has to guess if I’m still in-market for European flights and accommodation. They don’t have to target me with sneaky tactics or amass data to improve their guessing work. All brands have to do is to develop customized proposals that deliver on my parameters.

Another example: Many think the future of location-based advertising is conquest advertising. I check into a bar and the competition sends me an offer trying to lure me to their establishment. How about I declare my intent to brands (”Lunch for two in 15 minutes”) and for the next 15 minutes restaurants can send me offers? More powerful? Absolutely.

A growing concern with privacy and data protection will speed up the development of tools that will allow people to engage brands on their terms. The targeting guesswork will disappear and advertising will retreat from its brute tactics of the last decades and return to its roots: Being charming, being entertaining, persuading people into changing their behavior.

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Update: Great comment by Jim McCarthy. Social

Image: Courtesy of 10.media.tumblr.com

While the Facebook Privacy debate rages on, we have to accept a few facts:

• Facebook is making a play to own identity on the web.
• Not only that: Facebook is making a play to own everything associated with identity on the web.
• Facebook is banking on a value exchange between sites and their own database: We give you site traffic and data, we keep all the data to build a semantic map of the Web.
• We are entrusting personal data to a company that has a problematic record of dealing with user privacy.
• The majority of Facebook will continue to share information. Why? Because we want to share information.

Does this mean Facebook will continue to be the de facto Social Web? Absolutely not.

Facebook presents a huge opportunity and promise for brands: A data pile of personal information that should enable marketers to deliver more relevant and targeted advertising. Sounds like Behavioral Targeting 2.0. This model implies that people want to receive more targeted and relevant messages. And that’s where the whole model falls apart.

Most of the day, people want to be invisible to advertisers. They want to read or entertain themselves without any disruption of the advertisers. And there are times when I want to hear from advertisers or would love to have a comprehensive profile I want to share with companies. During that limited amount of time, I would love for Acura to know what kind of car I’m looking for and have an insight into my purchase history to develop a personal proposal for me. I would love for Travelocity to know that I’m looking for a hotel close to Heathrow Airport.

We just don’t want this information stockpiled, used against our wishes and used against us during a time when we don’t want to hear from brands. We don’t want information that we shared with one company sold to another company to deliver more disruptive messages.

What we want is to share our digital DNA on our terms. Not on the terms of data mining companies and marketers. On our terms.

Which leads me to the second reason why this model won’t work: My Facebook profile is not the real me. Nobody is the real self on Facebook. We’re revealing a very small part of our real self. Nothing more. Most people stay away from politics or religious topics. We never hear from major conflicts in anybody’s lives. Facebook reminds me of kid shows like Cailou or Berenstein Bears. Sure, there are some minor conflicts but, overall, we’re doing great and everything is awesome. We’re all playing a part in the Facebook world, just like the avatars in Second Life. How do you expect to deliver relevant messages to me if you don’t know the real me?

Last but not least, if Facebook becomes the Social Graph, innovation will stop. Imagine Internet Explorer as the only game in town. No Chrome, no Firefox. Only IE allows you to access the web. If that’s scary, think about Facebook being the only Social Graph in town. No innovation. Stagnation. The Social Web would end before it even really started.

That’s why we need for people to claim ownership of their data. Allow them to store their personal data in a safe and secure space. Share any data on their terms:

• Dental records with their periodontist and general dentist, avoiding lengthy approval cycles and wasteful document exchanges.
• The intent to purchase a car with preferred brands. Allow them to send personal proposals. Eliminating the guesswork and sneaky, behavioral tactics of marketers.
• Their food preferences and budget with restaurants through a location-based application. Allow restaurants to send time-sensitive offers based on personal profile.

Advertising, as defined by Wikipedia, is a non-personal form of communication intended to persuade an audience to purchase or take some action upon products, ideals or services. The current landscape of advertising feels more like a battleground and not a persuasion lounge. We have done the same thing over and over again. More efficient. More relevant. More targeted. It’s still not working.

I don’t know about you, but I don’t really see the benefits of living in a world where brands constantly have to fight for and with customers. I’d rather live in a world where brands and people co-create and collaborate. And people share what they really need. On their terms. And advertising could get back to its core business: charming and persuading people.

We’re not consumers anymore. The majority of us are producing ideas, sharing photos, thoughts, comments. Because we have become producers, we have much more power than we ever had. The industrial-age power structure of companies(Coke) buying white spaces/time on properties of producers (Time Warner) is rapidly disintegrating and being replaced by a new economic ecosystem of collaboration and co-creation. The challenge for most companies: How do we value this new ecosystem appropriately?

It’s easy to put a price tag on a transaction – You make something of value, I buy it and give you something (most likely money) in return. That’s the idea behind exchanges and the industrial age. It’s measurable. It’s efficient. But, there’s something else taking place: The relationship economy, aka The Karma economy). If I help a friend finding a new job, I don’t expect anything in return. When I love my kid and try to create the best life possible, I don’t expect anything in return. When I smile at a stranger on the street, I don’t hope for an exchange of emotions. I just want to be generous for the sake of being generous.

At its core, the Web is generous.  That’s why it’s so disturbing (or better: infuriating) that a company like Facebook, relying on the generosity of its users, develops monetization solution based on exchanges. A relationship economy brand tries to get rich based on monetary exchanges: In exchange for the user data, produced through the generosity of its users, brands pay Facebook to target users with more relevant messages. A total disconnect if I’ve ever seen one.

All this talk about Facebook being the Internet is just silly and there are warning signs that Facebook might be facing a groundswell of deletions very soon. The Internet landscape is littered with ruins and pitiful remains of companies that believed to be the Internet and Facebook will suffer the same fate. As they should.

Given the generous nature of the Web, people were willing to share data points with the world and didn’t expect anything in return. Sure, a badge from Foursquare is nice. That only works as long as all stakeholders are generous and understand this as a relationship, not an exchange. Users are beginning to understand that most brands just use their data to deliver commercial messages and pay a lot of money to get access to that data. Leaving the user with a shiny badge on his iPhone and data mining companies with impressive balance sheets.

Some look at Congress to legislate behavioral targeting and ease privacy concerns. Others hope the industry will self-regulate itself. I wouldn’t bet a dime on these initiatives. But I bet the house on the creativity and originality of people engaging on the Web. Privacy was always about control: We don’t mind sharing our personal lives and thoughts, but we want to control how, where and with whom. A privacy failure is always a control failure.

So far, our privacy options are limited to the options platforms give us (and how easy they can be located). The exploitation of by corporations leveraging asymmetric power to relinquish control of our data will lead to the obvious question: How can I control my own data, monetize it myself? Why should companies control my relationship with them? Shouldn’t I control the relationship?

People want to share their data and information on their terms. Yes, we want to engage with brands and give away our data to create innovative things. On our terms. When I’m in the market for a car, I would love to hear from brands that can customize offers based on my preferences. And when I made the purchase, I don’t want to hear from the again. Until I’m in the market again. I don’t mind hearing from a local restaurant about their lunch specials between 11.30 and 12.30 when I showed intention that I’m ready to head out to lunch. But don’t bug me before/after or in case I packed leftovers from yesterday.

Project VRM (VRM = Vendor Relationship Management) is still in its early stages and we haven’t see any real-life implementations at scale of this thought model. But, that’s where the future lies: Let me control my relationship with brands. Develop meaningful control systems that are easy to use and give way to a new ecosystem of collaboration and co-creation. The future is about a personal datastore, an aggregation of all relationships with people, platforms and brands. Completely controlled by the individual. Limiting the noise emitted by irrelevant advertising, spam and other commercial messages. Shaping the information flow and stream to receive communications when we want it, about things we desire. Ultimately, leading to a restoration of balance in the relationship between people and brands.