At LIRNEasia, we have used social media to drive traffic. As people spend more time on social media, they have to spend less time on something else. We were beginning to see the drop in blog readership (could have been caused by other things too). When we started tweeting and using Facebook, traffic picked up again. So we see the efficacy of social media. But the Economist has a point:
Most commentary on social media ignores an obvious truth—that the value of things is largely determined by their rarity. The more people tweet, the less attention people will pay to any individual tweet. The more people “friend” even passing acquaintances, the less meaning such connections have. As communication grows ever easier, the important thing is detecting whispers of useful information in a howling hurricane of noise. For speakers, the new world will be expensive. Companies will have to invest in ever more channels to capture the same number of ears. For listeners, it will be baffling. Everyone will need better filters—editors, analysts, middle managers and so on—to help them extract meaning from the blizzard of buzz.