I think it's massively dependent on which social media you choose and what your market is. I've seen a lot of success from local businesses on Facebook. They're usually photographers or crafty people. They market to the same demographic that fills my news feed with videos of kitties, massive amounts of baby pics, and hallmark card style quotes. Their business interests are very social to begin with. For them, social media is just the new word-of-mouth.
Then at the same time, I see a bunch of SEO's and online marketers writing blogs and Facebooking and Tweeting and I wonder what exactly their end game is. I understand why SEOmoz gives away so much knowledge, since they profit from people becoming qualified to charge for SEO, at which point ideally they sign up with SEOmoz's pro tools (like we did!). But a bunch of SEO's are writing the same stuff without thinking of who's going to read it. You can write all about, say, load time optimization or cross-domain canonical URL's but the people you're going to try to charge for your services are probably not going to understand or implement them. Better to write some tips on actionable things they can do themselves, like getting established in Google Maps/Places/LBC, submitting to business directories, or how awesome it is to be listed in the BBB website (it really is). Then they can follow your instructions, see success from them, and they'll trust you when you say that the more advanced/technical things, which they won't be able to understand, matter too. And they'll pay you to do them.
I also think that there are some kinds of businesses that aren't really suited to social media, or at least not directly. How would you do a campaign for, say, a wholesale medical supply and industrial solvent supplier? I doubt you'll be getting many people liking or sharing the new line of slightly more economical rubber stoppers. If you want to exploit social media, you'll probably be trying to generate creative link/share bait. A far cry from the ease of someone who simply knits baby hats and then posts them on Facebook to a chorus of Likes, Shares, and "OMG so cute!!!!!"
TLDR: "Social Media" works as long as you're using the right channels to reach the right people with the right angle on it.
-Dan from Path
