Yesterday Facebook announced that it was simplifying privacy and launched a massive PR campaign to prove it.  Assuming they can get over this little issue of privacy, they stand to own a huge chunk of advertising. Yah. I know. Big deal. Advertising is not cool nor does it work. 2% click-through!?!?!? Are you kidding. But this is a big deal. This advertising will be situational! What is situational advertising you ask? First let’s define some things and then do some “math”.

Behavioral Advertising – what I’ve done in the past and in the case of Facebook, who are my friends and what do they do.
Contextual Advertising – where I am, what I’m doing and what time it is.

Behavioral Advertising + Contextual Advertising = Situational Advertising

Again, if Facebook can get a handle on privacy and they can successfully launch location with features such as check-in – a massive amount of context will follow. Location is the icing on the cake. It provides behavioral information (where you’ve been recently and when) and contextual (where you are right now and when). It will also help with the adoption of location since only 7% of users are aware of location based services. (Between Foursquare and Facebook, the average user should understand location within a couple of years.) As a user, this means that you would only receive ads that are pertinent to you. No more refi ads!

Facebook already owns behavioral information. If Rockmelt is truly a Facebook only browser, Facebook’s understanding of its users will get even deeper. Hopefully they’ve learned their lesson and partner with their users on advertising.

Lions, tigers and bears . . . oh my!