We are fairly new to the web hosting industry and have generated most of our business from clients that we have done site design or database/backend design for. Since we are fairly new to the industry, we were wondering what the most effective and cost efficient advertising is.

Anyone have any suggestions?:D

Word of mouth. Takes a while though.

It is also good to advertise locally. :)

yeah, i have same question also, does paying to submit to search engine , or buy hits worth it ?

web hosting is a highly competitive search phrase on the search engines - you can buy a listing in say Inktomi (feeds MSN to some degree & some other minor engines like iWon) - but just buying a listing might place you at position 1 million in the results.

You can buy targetted traffic from Overture or Google adwords - targeted web hosting traffic is currently going for between $5 and $10 a visitor - which seems crazy, but is true

we get a lot of our customers from forums like this one, as well as word of mouth and we also get a few from webdesign, we host them after making their site.

Why dont you give away a couple of accounts to people hosting personal sites? These sites dont use too many resources but the poeple hosting may spread the word about your company.

Word of mouth is the most effective advertising, although it can be difficult when you are still growing.

Your best bet would be to find new places that other hosting companies have not exploited yet. For instance, Overture.com has been exploited by everyone...thus $8/click. However, there are many good places that you can buy discounted banners, or even good CPC services that have a strong draw, just not discovered by the advertisers yet.

Unfortunately, I believe that when starting you will need to spend money...you just have to spend it as wisely as possible.