Peter Kim recently posted a thoughtful article on the scalability of social media as an effective marketing medium. Peter argues that social media works well as an element of the marketing mix but does not naturally or effectively fit at either end of the marketing spectrum. With the utmost respect, I am not sure that I entirely agree, I think that a solid social media strategy can be additive at both extremes; from awareness - best provided by the mass media, to conversion - best provided by the varied mechanisms of direct marketing, irrespective of the platform, on or off-line.
In my opinion, the best place for social media tactics is across the entire continuum of marketing activities. The most effective social media campaigns have been extensions of mass advertising (I give you the Dove Campaign for Real Beauty). Furthermore, in terms of activation or conversion, I am intrigued by the potential of inter-connecting search and social media marketing and how this - most direct - of marketing mechanisms can be made more effective by the application of well thought out and integrated social media campaigns. At the simplest level, think about semantics and how the language used in customer generated content can be used to inform search strategies (oh and vice-versa...)