I am using both paid and free marketing. I think we should use both methods. But it will depend on so many factors.
If I have a brand new website where I need urgent traffic, paid marketing is very useful. Google Adsense comes handy in such situation. It will give immediate traffic. Then traffic is also targeted and can easily be converted to sales.
When I am focusing on long term traffic, I mainly target SEO. SEO cannot be used to generate immediate traffic. We need to spend time and effort to get our sites to top of search engines. But later SEO will pay back.
So I think traffic generation method will depend on following factors.
-Whether you need immediate traffic or not.
-Whether you need long term traffic.
-Skills and knowledge required for SEO, SEM