I agree that the use of social media for marketing purposes is only in its infancy. I don't think that many, if any companies have found the key to truly tapping the potential of social media for sales purposes. There most certainly is a lot of potential but the key is really finding the most affective ways to access social media from a company's standpoint and get the attention that the average person gives to their friends on social media.

Additionally social media takes grassroots sales to a whole new level. One of the other posters mentioned an example of this with their friend's book. Everyday people endorse products and services they use to their friends on social media, sometimes intentionally, other times just as a result of another conversation. Additionally facebook in particular has become the community to which you ask your questions. Anyone know a good plumber in the area? I need a wedding photographer, who did yours that you posted? etc. This type of grassroots, word of mouth marketing has always existed and is invaluable to companies. The difference is social media makes the connections larger geographically and numerically. When I say I really like that restaurant I went to last night to my two friends, well that is only two friends. When I make it my status on FB, it might be reaching hundreds.

I think social media is changing business by making social media part of business.  I don't think you will see the disappearance of traditional advertisements such as billboards or television ads, but a business would be downright irresponsible if it didn't take advantage of social media while its competitors were utilizing it.

When used correctly, social media can help a business be more responsive to its customers.  This can really lead to more effective products and marketing.  Most businesses are just getting used to the idea of using social media in their business model.  Some businesses seem to be doing a good job.  Almost every product has a Facebook page, but the ones that have polls and deals seem more effective to me.

I think that eventually, businesses will find a way to use the immediacy of social media to their benefit. We don't have that much experience yet with the lightning speed with which information can be not only disseminated, but also digested and commented on.

It depends on the business. I have a friend who is about to have a self-published novel developed into a major motion picture. He used Facebook to drum up interest in it, and I don't even want to think about how much money he's made even before selling the movie rights. What was a small project intended to be read only by friends became enormous in the span of about three months. So social media can be used to create interest and demand for a product quicker than older methods of advertising, the price of which tends to keep small businesses from advertising to a large audience anyway.

Well, since enotes is a social media based business and is doing quite well,  I think I must take exception with #3. Social media is so much more than just Facebook.

I think social media advertising is still in its infancy; it could be fairly compared with television commercials of the 1940s and early 1950s. Give it a decade, and I think it will have matured into a powerful force. It's human nature to want to fit in and do what others are doing; social media will allow businesses to target you through your friends and acquaintances.

When you go online to shop for something, your computer probably already offers you customized ads for similar items, or for things based on your previous online shopping. I think that the potential is there for advertisers to look at your social connections at Facebook, Twitter, LinkedIn, Google+ and so on, and to offer you products, complete with endorsements from people you actually know. We are social creatures and if such advertising is well done it will work very well.

I'm pretty skeptical of its ability to change traditional businesses.  Firms have tried hard to use social media as a means of advertising and/or building a positive image.  The results have not been spectacular so far.  It is very hard for outside firms to effectively use something like Facebook or Twitter (which are mainly for social interactions) and use them for purely commercial purposes.

Social media, to speak generally, is now a marketing tool as well as a vehicle of feedback where customers can contact, comment, and connect with businesses. 

These last functions were all once conducted through the mail service and therefore, more or less, in private. Now the customer-to-business conversation can be public and led by the business itself.