I was thinking AdWords is the best way to go.. but with my recent bad experience with them I'm thinking its not a good idea. (Spent £90 for 1Sale) Too much competition perhaps? Any ideas? My web design price's start from $99
Why not target the people in your area and advertise in newspaper? That should be easier and less competitive. Or maybe you can add some extra features in your service so that people will use your service.
Have you tried doing a press release. These can help not only with traffic but also backlinks to your website
By offering to do a few free designs (and do them well) for a couple of well-known webmasters in a certain niche in exchange for a testimonial from them and a link in their footer.