Are viral marketing techniques more effective then web advertising?

[pennys2dollars]

I am thinking of doing both for my website, but a banner ad which costs $1000 per month at least, gets a click through rate of 0.20% or 20 clicks per 10,000 views. That is very weak.

Would it not be better to advertise through social networks such as Facebook and Twitter, and through emailing lists?

[Jake Birdem]

Social marketing calls for the long soft sale, typically you have to take time to make friends first, Facebook ads are cheaper when targeting a Fan Page, but 0.15% conversion rates are typical for conventional PPC ads.

There are tons of paid advertising options, in some cases text ads do better than graphics (banner blindness) some banners with painted in text messages do better than slick graphics, split testing is essential for profitable advertising. Different ad networks have different targeting methods, traffic quality and prices, try a few.
An alternative that was hot a few years ago is CPV "contextual" advertising, basically user installed adware pops up your ad window (or live site) when they visit a site you have targeted.