Mark look at your free paper and see who advertises there already, if you can look at some back issues and see if they constantly advertise, might be worth calling the smaller companies and asking them if their advert brings in work.
the problem with asking questions on here is people can only give information that they have , and they tend to believe this information is true of everyone & everywhere.
so Steve's first post says 'Free newspapers attracts the wrong type of customer. what he mean and later says in a subsuquent post is; 'his local paper attracts the wrong type of customer
Spencer says; 'our re cycling box is near our front door, free newspapers go straight in'. this is what he does
you need to suss out whats true for your paper,
also look at what articles are put in it, in mine all the local childrens sport is covered, U12-U13-U14 football, indoor balls, local athletics and the local Polo club is featured, the big paid for paper might give a quick mention of these Events, but the free paper does full page spreads.
who do you think reads these articles? local people, alot of them have money, they are not all price shoppers