The fact that you are wondering which type of advertising is better leads me to believe that you understand marketing is clearly the life blood of your online business. The large majority of your time should be spent advertising and promoting in some form or another. Let's talk about which is better between paid vs free marketing methods.
Just so that we are clear, I don't believe in free advertising. It's not that you can't advertise your business without pulling out your credit card but you can't advertise without paying a price. It's either time or money and ultimately both have a price you'll have to pay.
Now that you understand that there is no free lunch you must make careful decisions as to how you will either spend you time or your money. The first question is how much is your time worth. The next question is how comfortable are you with doing certain things on your own.
There are upsides and downsides to any form of advertising that you do which is why your main focus should be on effectiveness. By this I mean it must work and produce the desired result. Advertising for advertising sake is a recipe for disaster and will leave you burned out and broke.
First, let's look at free methods of advertising and how you can benefit there. This method gives you a level of "in the trenches" experience that will go a long way if you decide to use paid methods in the future. The hands on aspect of it gives you an understanding of the marketplace and how it responds to certain messages which is invaluable.
With paid advertising on the other hand, there are also some strong arguments as well. Typically with a paid advertising you can consult with vendors to determine the
expected outcome based on their experience. It is leveraged so it saves you time that can be used building your business in other ways.
Now regardless which way you decide to go I recommend you set up tracking systems so you can test your results. Not knowing what's working and why it's working is one of the worst positions you can be in as a marketer. When you understand the source of your results you can make wiser decisions with both your time and money.
When all is said and done I suggest doing some research to find out which method is right for you. Trying out more than one method is fine but be careful not to become a jack of all trades and master of none. Try to become proficient and achieve results with one form of advertising before jumping to the next. Ultimately, this strategy will prove most beneficial to your long term success.