I'm not sure what to make of this blog from the Word of Mouth Marketing Association pitting the value of word-of-mouth against straight-forward advertising (brought to my attention by Adrants). WOMMA's thesis seems to be that if you're engaging in any sort of paid-advertising you are wasting your money, that it's more important to get people talking about your product than to advertise it in any sort of mass-media way.

Personally I think word-of-mouth or (shudder) buzz is of course a good thing but that it is comparable to a fire. The spark that sets it off is - and I think almost has to be - some sort of paid promotion or ad. It would be very difficult to start people talking about a new product if a company did nothing to promote it and those promotions cost money. That's why communications people need to have a mash-up, in Mike Manuel's words, of skills previously scattered among the advertising, public relations and marketing niche fields. Paid ad placement works for "X" percentage of the population. If you don't do that then you're missing out on that market no matter how successful any unpaid efforts might be.