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.