Word of mouth has always been the most invaluable form of marketing. In fact it's so invaluable, you can't buy it. People have a way of seeing through paid actors or manufactured buzz for what it is, traditional marketing. But with the internet, websites can generate recommendations based on consumer buying habits, which are basically the same as word of mouth (if not better, since somebody actually spent money).
Amazon is great at this. I get regular emails recommending new products or books based on what I've bought in the past. In fact, when I log in, they even tell me what I searched for last and what other people who did the same search also looked at and ultimately bought. This makes it so easy to look past the hype that I feel like my online shopping experience is quick and painless.
iTunes and a whole list of other online music destinations are also good at this game, and it's a great benefit to lesser known independent musicians like myself. More people listen and by more music online, the more likely my music will be recommended to the right crowd. On iTunes, people that buy music by Grant Green, Soulive, John Scofield, Greyboy All-Stars, Global Noize, Robert Walter, etc. will be pointed in the direction of my music via iTunes' "listeners also bought" section and the new Genuis sidebar. My tracks will get streamed on Last.fm thanks to user tags or listening habits that match up similar artists. I love it.
So how does one get the ball rolling? How do you get people that don't know who you are to find your music in the first place so it those connections to similar, better known artists are established? Simple. Playlists.
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