To answer this, let's first distinguish how Google's AdSense differs from Facebook Ads. Google displays advertising that aims to be of relevance to users. It does this mostly (but not solely) based on the content of the pages web users are viewing at that particular moment and by taking searchers' historical Web surfing and searching habits into account. Facebook, however, takes this one step further by introducing a more personalised system that takes into account users' friends, interests, on-site activity, likes, dislikes, application usage, and group involvement, to name some.
The truth of the matter is that they're different strategies altogether. Facebook targets networks of trusted communities whereas Google targets Internet users at large, most of whom use search engines to find content (although StumbleUpon is become a very useful alternative).
Furthermore, people who use search engines to find organic or paid listings are quite intent driven – they are on a mission to find what they are looking for. This is why the ROI of search is quite high.
Facebook on the other hand is a system that uses word-of-mouth and to a degree permission marketing principles to target users whose only real intent is to engage with their friends and contacts.
So, to answer my own question, each has its place in the advertising market, including in South Africa. The “winner” will ultimately be the one who delivers conversion, because that's what marketing is all about. For Facebook's Ad system to be successful, it will have to figure out the very fine balance (if it hasn't already done so) between on-site targeting and prospective intent.
However, let's not hand over all responsibility to Facebook or Google; advertisers themselves need to be clever in how they market their products, whether through search or through social networks, because ultimately, as is the case with Google AdSense, while the technology is superior at targeting people, the advertising itself (creative, copy, etc) needs to speak to the users. And to do this, marketers need to understand how users consume social media.
One thing is clear, pushing brand messages is not the answer. The answer lies in making the adverts (or more appropriately, messages) themselves engaging.
