Facebook doesn't "know" that concert ads are better for me (although it can tell from my profile what music I like, where I live, and maybe even what concerts my friends attend, etc), but it can try different ads and see what works because of the large number of page views in a typical user session. In Google, you search, get the results, then leave the google.com. In Facebook, you can easily navigate to dozens of pages before logging off. This gives Facebook the opportunity to try different ads and see what works and what doesn't.

I agree with your main point, but the bottom line is that even if Facebook's CPMs are lower than Google, it doesn't mean that Facebook can't make a ton of money from advertising or that advertisers can't get good ROI on Facebook. You don't need to be Google to be a successful advertising platform. Also, don't forget that Facebook is still young and I'm sure many advertisers haven't yet adopted it. I have a friend who does internet marketing and he says that, at least in his niche, Facebook CPMs have been increasing by 10% a week.