From his executive summary:
Both Facebook and MySpace have launched profile and network targeted advertising and marketing products. As they both use member interests and the communities which they are part of, trust continues to become key in adoption as information is passed along the network. The sheer size of MySpace's member base, as well as the thriving local business membership will lead to success. Facebook, which brings a unique solution evolves advertisements to endorsements and encourages members to subscribe to a brand in what we are calling "Fan-Sumers" (an evolution of the consumer). As consumers share their affinities, brands can advertise using trusted social relationships.Advertising as we know it is indeed dead. Word of mouth has always been more powerful than messages shouted from on-high. And now, with Media 2.0 reducing friction to zero and increasing visibility toward 100%, Word of mouth has never been stronger - or more important.
Your words now echo for all of time - and they get louder as they travel.
So moving towards a world where sites can enable brands to better facilitate and moderate the word of mouth network seems obvious. The problem, though, is with the fundamental thinking at these organizations.
For example, the name Fan-sumer is disgusting. FANatical ConSUMER? It's far worse than User Generated Content! Sure it's just a name, but it is a revealing insight into their line of thinking.
Word of mouth is not sanctioned, it just happens. Ultimately the best you can do is join in the conversation. Giving away 'free steak knives' to your friends only reduces everyone's credibility.
As I said on Jeremiah's post, however, the core idea is not a total write-off - but it will need heavy modification to align with reality - friends trust each other, and helping them spam each other does nothing for anyone
Fan-sumer? So now we are further reduced to FANatical ConSUMERS?
As usual, the underlying idea is interesting, but the execution is so user-unfriendly (the name alone reveals their true intentions) that they are just legitimizing peer-to-peer spam.
As a true social solution for advertising it is not a write-off, but the execution needs a lot of tweaking to be truly about engagement and personalization with a true sense of trust based endorsements from your friends.
Update: I have also posted about this on Blognation.