I don’t think it’s a matter of one or the other. I think it’s about effectively using both.

We’re talking about two very different vehicles. Word-of-mouth and social networks rely on people that know about you, your product or your service, and discussing that openly.

Online advertising is about driving people who are more generally looking for something you offer that don’t know you or your business, to your website.

You need to realise though that online advertising it’s all about your advert. Obtaining good click through rates from a well-constructed advert is one thing but the real key is where they land.

You really need to ensure that the content your customer lands on is relevant and powerful.

While word-of-mouth and social media are both considered free, it’s important to know what people are saying.

While having control over the content of an advert, you have limited control over what people have to say about you and your organisation.

Monitor social networks and look to set up Google Alerts (especially if you are in hospitality or tourism) and be proactive about solving people’s issues or thanking them for positive feedback.

In fact, we’re now seeing many large organisations hiring extensive teams to monitor social networks to do exactly this and drive a new competitive edge in their markets.

Some are even providing these teams with high levels of delegated authority to solve customers’ issues.

So despite your budget, I believe these are two areas you should be conducting rather than trying to choose between them.

Marketing is never about using one vehicle. Multi-level marketing is much more effective and in this case is easily achievable within a small budget.

Just remember to be tightly targeted and be proactive. Monitor everything and make changes as needed.