I have done a newspaper ad and posted flyers all around town. My husband kept telling me that the only way I was going to get children was through word of mouth, because people wanted to know the person watching their child. That has proved to be mostly true. Almost all of the children I have cared for, their parents heard about me from another parent or from one of my friends who said a good word about me. I have had some luck with craigslist.com. I cater to families who need part time or occasional care which is really hard to find where I live, so this works out great for some families.
I do everything. mailers, postcards on cars and anywhere else I can put them. I've tried newspapers but not lately because it is so exspensive. online I use my website and anywhere else I can add my daycare for free. I do a little faxing here and there. I advertise my night care with the daycare centers. I advertise my infant care with the preschools. I will even be out on the day after thanksgiving sales putting postcards on cars and giving them to those long lines of people waiting to buy a $5 big screen tv. ha ha
Most businesses, including daycare owners, usually UNDER-utilize testimonials from their current parents as a great tool to get new ones. You should gather testimonials with a real first & last name and town of the person giving the testimonial (with their permission), then use them whereever you can - on Craiglist ad, on website, on flyers, even on the back of your business card. When parents read your glowing testimonials from other parents it provides "social proof" that you are a good child care provider and you'll get more calls.