Perhaps the key to making social network ads work is knowing where people are. AdWords has made marketing many, many internet only niche businesses possible. Privacy issues aside, Facebook could allow local bricks and mortar businesses to reach people geographically nearby via the internet.

While Facebook is a great way to keep in touch with friends who don't live nearby, I'm also friends with people that live in the same town and I see all the time - to see photos, arrange events, etc. You can join a group for the city you live in.

So, Facebook knows where people are and that some proportion of their friends live there too. Now there is new market for offline businesses - garages, restaurants, bars, shops - to reach local people on the web.

There are even Facebook groups for people that work in the same company. I'm sure the pizza place across the road from one of their buildings would like to advertise their promotion to everyone in that group.