Gordy,
Advertising plans are one of the most troublesome parts of running a hosting business. You have to think this way. There are so many hosting companies out there that would charge someone $2.95 per month when you are trying to sell it for $5.95.
What makes the difference is what do you have that is going to make your customers stand out.
I started workingo n an advertising campaign about 3 months ago, and it is still in developement. Im doing a lot of research on a narrow section of businesses in my area. Such as child care and small law firm practices.
I've installed lots of perl modules and a few scripts that I think might help these certain businesses out, that other standard regular hosting companies might not provide. I then went into the stage of writing individual letters to the head of the organizations explaining how we (vovex technology) could help benifit their company by establish a strong presence on the internet. Lots of small local companies will gladly pay $500+ for a simple 3-4 page site layout and their own custom email address, and a year of basic hosting included with that. Right now im am working on the brochure part of my plan. Im putting together a well rounded 4 page brochure that explains our services, a bit about the company and then why they should choose us.
I figure in the next few weeks I should have everything together. .. and I plan on sending out about 114 letters to the local businesses that I have been researching.
If people see that you are willing to put your time into them.... even with out getting a sale. They will remember you for the next time, and maybe you will even get a few referrals.