I'd never encountered the term payola before today, when I encountered it in a Wall Street Journal article.
Entitled The Wizards of Buzz, the article discusses the emergence of an influential kind of super-user on social bookmarking type websites such as Digg:
Items that receive enough votes rise in the rankings and appear on the front page, which can be seen by hundreds of thousands of people. When an item is submitted by a popular or influential member -- one whose postings are closely followed by fellow members -- it can have a much better shot at making the front page.
These influencers are what Malcolm Gladwell (author of The Tipping Point) would call "mavens".
Indeed, the influence that a small "cabal" of 30 or so Digg users have over what appears on the site's homepage has often been noted by annoyed bloggers, with some even claiming that Digg's rigged (which reminds me of that silly but cool line in Pulp Fiction: Ed's Dead baby, Ed's Dead [which in turn ripped off an obscure but great Pixies song]).
This led to Digg changing the algorithm that determines how articles make it to the front page, although this only fuelled more speculation among SEO practioners about how to crack that algorithm.
The WSJ article claims that marketers are teaming up to offer web payola:Payola schemes depend on the voting system these sites employ. Some marketing companies promise clients they can get a client front-page exposure on Digg or one of the other social-bookmarking sites in exchange for a fee, according to marketers. To deliver on that promise, the company then recruits members at the site, offering to pay them for thumbs-up votes on the posting that links to the client.
In the "early" days of SEO (more than three years ago), the only site (or algorithm) marketers cared about was Google's. Now, it seems, there are more and more sites to reverse engineer . Getting to the homepage of Youtube or MySpace can break a garage band. Could it break a garage brand?
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