This came to mind while I was reading this thread but it seems just off-topic enough there to justify a separate thread.

In other threads here, a common theme is that "word of mouth" is the best selling technique. Seems to be something everyone agrees with. But then, some of the same people see $4/click bids on PPC engines and do simple math to convince themselves that such a bid can't possibly we worthwhile. Perhaps that's missing the big picture.

Say, to keep the math simple, your conversion rate on those clicks is 10%. How many new customers, for you "word of mouth is the best" advocates, will one happy and satisfied current customer bring? Think of this: if the answer could be "ten," you'd be getting, effectively, a 100% conversion rate for that $4 click!

Of course, there's a catch: you have to keep your customers happy.

The point is that it might be shortsighted to think that the companies placing seemingly highly priced bids, or buying expensive advertisements, are throwing their money away. I know as someone who's focusing every day on search engine positioning that I have to constantly remind myself to take a broader view of where to take clients' marketing efforts: branding and "viral marketing" campaigns can be built on more narrowly-defined campaigns that at first glance seem unlikely to be profitable.