Yes and you also don't need to reach all your customers directly. If you make a good product word of it will spread naturally. Ads actually inhibit that by taking over people's attention and pre-empting any interested customers from finding you by showing them your competitors first. So you end up paying for the reach that the advertisement industry took away from you in the first place.

Of course, word of mouth requires you to actually make a good product whereas with advertisment it's enough if your product looks good.