Unlimited customer reach
Direct referrals are always an effective method of procuring new customers. With social media mentions, there is unlimited potential in the word-of-mouth method, and the rate at which it can happen is tremendous.
The old model of referral business is that one person tells six people, and each of those six tell more, and so on, which is good just by its exponential nature. Now start multiplying by however many followers each brand advocate has -- hundreds or thousands -- and we start talking about huge numbers instantly.
There is a second part to this that is the credibility that comes with this kind of advertising that cannot be reached with paid advertising. An individual does not presumably have anything personal to gain by awarding praise and recommendations of their favorite products and companies, so the opinion is typically regarded as genuine. If an ad features a testimonial, on the other hand, it is assumed to be compensated and therefore less valuable.
