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Which is better? Word of mouth? Or Advertising?

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Word of mouth, because it's a whole lot cheaper ;) In all honesty, both are equally important. For company branding, and to get the word out there, you want to go with paid advertising in the form of PPC text links as well as banners. But any amount of advertising is never going to be cost effective if the site isn't good enough for visitors to share with others and spread the word. That's how sites grow :)

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