Facebook’s advertising continues to amaze me: it’s awful. They probably know more about more people than any other organization in history, but they still think I’m interested in reading Cracked Magazine. Other advertisements are just as crude, despite the ability to target consumers by age, location, education, and even interests (a huge targeting step up from TV and radio, I admit). The problem, I think, is marketers: they’re allowed to keep doing what they don’t know how to do.

Take Netflix, Pandora, Last.fm, Hunch, and of course Amazon. They provide very relevant suggestions for what to watch, listen to, read or buy next. Using “taste modeling,” Hunch.com asked me 20 questions, ranging from how often I make my bed to my stance on climate change, and was able to immediately recommend me a book that I loved. To Hunch and the like, exposing people to new things they’ll love isn’t an advertising problem. It’s a math problem.

Think about what Facebook knows. Just with the things you’ve ‘like’d, there’s a lot of data about your interests that can be used to compare you to other users. That’s just the information explicitly shared with Facebook; it pales in comparison to the stuff they can learn about us by analyzing who we talk to, what we talk about, and how we talk about it–areas that are respectively studied by network, content, and sentiment analysis. Lots is said about tons of things on Facebook, and it all sits in a database begging to be analyzed. So why doesn’t Facebook poach all the clever folks from Amazon, Netflix, and Hunch, mine their data as if it were gold and reinvent advertising as we know it? I’ve got is a theory.

Netflix and Amazon went to market with business models. Facebook just kind of happened. Facebook never sold anything and had no revenue stream, so they had to get funding. With that funding came old-style thinking about monetization and advertising. Facebook had (and has) the capacity to advertise to people in tremendously personalized, relevant ways, but they’re constrained by trying to shoehorn traditional advertising onto something fundamentally different. Customer expectations about personalized continues to rise, creative firms lack the skills to meet them, and Facebook, the best-positioned company to get it right, is tied down by paleolithic thinking. Advertising needs to be reinvented for today’s world. There’s a lot of opportunity here.