Now, word of mouth.
Which literally means passing word from one mouth to another. In other words, it's the spread of the information (word) person-to-person, face-to-face.
As a form of communication, word of mouth is in stark contrast to propaganda spread through the public loudspeaker - radio, television, the Internet or what have you.
In contrast to massive marketing campaigns, the word of mouth is informal, costless and reliable, or it can be deceptive depending on the case. Press conferences on the other hand, are formal, more costly to stage-manage and more reliable, or they may be more deceptive depending how you look at it.
This granted, and depending on the particular case, word of mouth sometimes outperforms expensive commercials on TV.
The restaurant business for instance usually leans on word of mouth. Where I live, there's restaurant that I think has been thriving on a good word of mouth. This restaurant is small and shabby. Really shabby - its front walls resembles those of an abandoned outhouse, the door so small that I suspect some of its hefty patrons can barely squeeze through. No two customers of any size (lean diners are hard to come by anyway) can possibly walk through the door side by side. And it doesn't have a menu, serving one dish. Yes, serving one dish alone, a boiled-then-barbequed fish which is finally covered up with chili peppers, Sichuan style, before being brought onto the table, shabby table it is too, though it is wiped clean.
Shabby though it looks, the place is packed day and night - it has a good chef, obviously. You have to book a place in advance or face the less-than-savory prospect of watching other diners having a good time nimbly picking out fish bones and nibbling the meat, following each bite up with a series of oos and ahs (in acknowledgement of the chef and due more to the lip-burning chilies).
How could it ever achieve a capacity sellout but from a good word of mouth! Certainly it does no paid adverts and it doesn't have to. The clients will spread the word for it, either via excited let-me-tell-you-this-place mobile messages or during idle gossip. As the old Chinese saying goes, if a restaurant sniffs of a good wine, it fears not the deep end of an alley.
For a small stand-alone restaurant, word of mouth is enough. Not for big businesses. The McDonald's and the KFCs, for example, rely heavily on TV commercials and are situated in populated areas and easy-to-get-to spots. Instead of selling on food - they sell on the food too, I suppose, such as it is - they sell on convenience.
Hollywood blockbuster movies, on the other hand, spend millions of dollars on advertising. This is often worthwhile because overwhelming ads are able to lure folks to the cinema. And if the movie is half-way decent, studios can often get their money back in a matter of days or weeks. If word of mouth later on turns out unfavorable, so what, the money will have been made.
If the movie is mediocre and the cost of production is very great, then over-reliance on commercials may not be worth the candle. In the long run, you need a good word of mouth to keep drawing new audiences.
I recall The Waterwold (1995). That movie, starring Kevin Kosner (Dancing of the Wolves), was reputedly the most expensive (costing something to the tune of US$170 million to produce and promote) movie ever made at the time. From poor word of mouth, it quickly withered into one of the most expensive failures in history.
If the film is good quality, on the other hand, it may not need megabucks marketing. Word of mouth will do. Four Weddings and a Funeral (1994), for example, is a British comedy made on a small budget (US$4.4 million, small by American standards), but word of mouth enabled it to have a lasting success spanning months and years. In the end it became a hit the world over.
At the end of the day, as they say, when all is said and done, word of mouth (reputation) counts.