As I've said before, in terms of marketing, blogs are not selling channels, they are disruption channels.
And when I talk about disruption, I'm talking about the disruption of the company, not the disruption of the potential customers' purchasing behavior.
So to Madison Avenue, let me ask the question:
So you want to build a blog for your client. What part of their company are you trying to disrupt? And what makes you think they're going to let you?
If you don't know the answer, your client doesn't need you to build them a blog.
What Hugh says applies just as much IMHO to the use of blogs inside organisations. If you don't face disruption, don't see the benefits of disruption or don't think you can handle disruption then don't go near social computing tools in your business.
I have had a number of conversations recently with people along the lines of "Why should we get into social computing when we already know what we do, know what needs to be done and know how to do it". I don't know what world they are living in but it is certainly one which I have never experienced.