Every author wants to know how to get the word out about his or her book — and most are frightened that it's going to cost an arm and a leg. To be honest, the most effective marketing that an author can do doesn't involve paying money. Just lots and lots of time and effort. So not free, really, but no-cost, at least!
Before you hire a publicist or start looking at paid ads on Facebook, Goodreads, Google Adwords, Bing, Twitter, etc., be sure that you have done everything that you can to let the appropriate people know about your book. Contact all of your friends and family, obviously, and encourage them to share the information about your book with everyone they know. Send well-crafted, focussed press releases to newspapers, magazines, and radio stations that might be interested in your subject.
Next (and most importantly) build your Author Platform — whether that's just a blog on a site like Blogger or WordPress or your own hosted web page. Spend the money to register both your name and (if you can) the title of your book as URLs — this is probably the best money you'll ever spend, marketing-wise, and it shouldn't be expensive. You can forward those URLs wherever you want — either to your own site or a page on someone else's. Wherever that may be, make sure that your book has a dedicated landing page (ideally with links to all of the retail outlets that carry your book) and that all press releases, comments, blog entries, and social media posts link directly back to that page. Post regularly, not just about your book, but on your thoughts on the subject matter, how current events relate to your book, etc. If it's available (either on sale or presale), include links to buy your book — whether on your own site or elsewhere. Share the content that you create on your page/site on Twitter, Google+, Facebook, LinkedIn, etc.
Find as many online forums, newsletters, Goodreads lists and groups, Facebook groups, LinkedIn groups, Google+ groups, blogs, etc. that focus on your book's genre or topic. Comment there — don't just spam the feed with "MY BOOK IS COMING OUT BUY IT NOW!" but actually participate in conversations; get to know people, and let them get to know you. (Make sure that you include your book's title/genre and a link in your bios and profiles!)
Many, many online reviewers and review services are free to the publisher (this is as it should be; paying for reviews has always struck me as ethically fraught, to say the least). Look for reviewers who like books similar to yours — or whose opinions you find you really agree with. Be very careful not to submit titles that they're not likely to read or like!
Goodreads has a number of ways for you to promote your book without having to pay for it. First of all, make sure that they have a listing for each edition of your book (paperback, ebook, audiobook, Kindle, etc. If you publish through CreateSpace and/or Amazon's KDP, they will create a listing automatically). As I said above, there are groups there for just about every genre or subgenre — find one or more that fits your book and become a regular there. Also, you can hold giveaways — Goodreads will promote a raffle for copies of your (ink-and-paper) book; people have to say that they want to read your book in order to participate, which not only means that your book is now on their to-read list, but their friends will get a notification that your book has been added, which will hopefully make them want to check it out. Typically, hundreds more people sign up for a giveaway than actually win it, so this can be a very effective form of marketing — even after a book has been out for a while. Make sure to create a Goodreads author page — even if you only have only one book, link it to your blog so that readers and potential readers have a chance to get to know you and your book.
Create an Author Central page on Amazon — not only will you be able to create a page that includes information about you, with photos, videos, events, and links to your Twitter and blog feeds, but you'll be able to keep track of sales and reviews on the largest book retailer site.
Once you have established all of that, then you might consider some paid advertising — though that needs to be carefully thought through and have a clearly defined target audience to be effective or you'll end up spending far more than you'll make back. Paid ads are most effective in large volume — so if you are trying to market a single book, your money might be better spent on designers and editors.
(When should you start doing all of this marketing? NOW. There's a saying — and I wish I knew the source — that the proper time to start marketing a book is two years ago.)
Image: Bookstore by Nataia Romay. Used through a Creative Commons license