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I just started a free hosting business, and since it's a free hosting business, it isn't hurting me any if they go to another host! So, I could trade links with you if you want? I will place a link to your free hosting business on my free hosting site if you'll place a link on your site somewhere that leads to one of my other websites? That would help the SEO of both of our websites too! Not my free hosting site, but maybe one of these>
This is what's always worked for me: listings in free hosting directories, posting on webmaster-related forums (signature link), word-of-mouth. I have found (through trial and error!) that there really is no need to spend money on paid advertising (though it can help jump-start growth).