I believe the best way to advertise, is for you to directly contact businessess or clients personally. Especially in the beginning. I have never bought any hosting from banner ads or internet advertising. I have had several different hosting accounts all of them with the same company until I started my own and the way I found out about it was word of mouth. So when you start talking your company up, get others talking it up and soon you'll have people coming to you that you don't even know.
This is one of these things where either it will work or not and the best way to advertise is to test different methods and take note of how many customers you get per type of advert and this will allow you to comiple a review of what works for you and what doesn't and then from there work an advertising budget.
I believe the best way to get your message across is word of mouth. For people to find your site, I think forums are pretty good choices. Another good way to advertise is to sponsor a website and ask for some kind of ad on their site.
Word of mouth is great, but in order to get word of mouth you have to have "mouths" that have been to your site in the first place.
You could have the BEST website in the WORLD with the BEST services/products/etc... available at the BEST price and offer TOP NOTCH support...but if you don't advertise in the first place how will anyone go to your site?
Word of mouth is great, but you need to catch the fish before you can share it.
I totally agree with you, but I failed to mention it. Some companies can't spend the "big buck" for great advertising locations. So, sometimes they must rely on small ads and getting their message across in a forum. Word of mouth advertising is the best kind of advertising, in my opinion. It is targeted to its market, very effective, and free.
If you host blogs, tape (duct of course) a banner to the side of your char, and drive around middle schools. If its a pay site its advised to be in a good neighborhood.
If i had a car I'd drive to Quakecon with a loudspeaker and announce my game hosting, or maybe drive down to CPL(hardcore cs/dod players galore) and do the same thing.