As you said, one thing that scares coempnias away from using social media is the fact that they might get trashed publicly for it. What a lot of coempnias don't realize though, is that this can actually be useful feedback. Take viral video sites like YouTube and Google Video for example. One thing that you'll find that's often really popular on these sites are advertising campaigns. Users will often submit TV rips of commercials they enjoyed and they'll get a lot of other users in agreement with them, praising the commercial. Now, what's to stop coempnias from doing the same thing? They could submit an ad for free and get feedback on it which they could use to measure it's effectiveness, plus get a lot of free brand recognition before even having to make any investment in advertising deals with traditional media outlets for the ad, and potentially save a lot of money if the ad is deemed ineffective.You have the same kind of free testbed with print media and software applications on the social bookmarking/news sites like digg, reddit, Newsvine and del.icio.us. And of course, with MySpace, we've already seen a lot of independent musicians make a name for themselves for free.To summarize, I think that social media marketing is a very cost effective solution for advertisers. However, it's worthless if you either ignore your users, or are afraid of user backlash. If you're willing to listen to the user feedback (both positive and negative) and use it in an effective manner, it can be a very powerful tool. Much like anything else though, coempnias are going to take a while to learn how to use it to their advantage.