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I've found that guest posts are a great way for freelancers to (a) reach potential clients and (b) position themselves as experts. In fact, nearly all of my clients have come from guest posting and even a small number of posts can go a long way for freelancers. Related to point (b), guest post leads are easier to convert since they already view you as an expert.
One thing to keep in mind is that 1,000 visits is not very much traffic. Your other numbers are probably off slightly, especially since you can upsell people who do buy in order to generate more revenue, but more importantly, in order to make money with content, you'll need to generate a lot more than 1,000 visitors per month.
Step 1: Ask your customers
"Thanks, Ted, we really appreciate your business. By the way, would you happen to know any other business owners who might need our services?"
The best time to ask is also after you've helped someone and they're really satisfied with your service.
Step 2: Ask people who turn you down
"Since you're not interested at the moment, Ted, would you happen to know anyone else who might need our services?"
Just because someone isn't an ideal client doesn't mean they won't recommend a friend who might be. It never hurts to ask.
Step 3: Pay a referral bonus
"Hey Ted, I don't know if we've mentioned this yet, but if you refer any friends, we'll give you a $50 gift card to Jack's Steak House. You can either give us their number or tell them to mention you when they sign up."
It never hurts to incentivize the referral process since sometimes people need a slight bit of motivation to recommend you to their friends.
These are the three things I'd recommend, and it all starts with not being shy about asking for what you want, especially when you've already helped someone and they're really satisfied with your services.
I agree with Joseph in that at some point you have to begin running campaigns to test your theories. After a few months or a year, you'll have a lot of data that shows which categories convert, and which don't.
One thing I'd add is that the higher you get up in the funnel, the more expensive it is to use AdWords to generate awareness. AdWords is great for high intent terms such as when someone searches for a plumber. When they search "plumber in San Francisco," for example, you know they need a plumber in San Francisco and are ready to buy. But once you get higher in the funnel for a service like yours with more vague generic terms, the more expensive it is to generate initial awareness with AdWords. With that in mind, I'd consider other traffic sources for earlier stages and AdWords more for higher intent terms.
I was with you until $10 an hour. In my opinion, you will not be able to find a marketing expert for $10 an hour. You may be able to hire a marketing "expert," but not an actual one.
If your rate was a little more realistic, I'd consider hiring someone who does good marketing but lives in a state with not as high of a cost of living. You can save some money that way, but I don't think you'll be able to find anyone good for $10 per hour.
You mentioned long-tail in which case I'd recommend reading this article to learn more about how you can use content targeted at long-tail terms to generate organic traffic: http://blog.ispionage.com/400000-organic-visits-from-long-tail-content.html.
I'm not saying that's the best approach for fast results, but if long-tail is something you're looking at, you may learn something from the read. It's also an approach that requires effort and time which creates a barrier of entry to your competitors copying your efforts and doing the exact same thing.
I wouldn't trade equity for a service like this unless they were going to become a long-term contributing member. You're much better off finding a way to pay for the service. You can also do things like find ways to lower the price as much as possible such as a link at the bottom of your site that says, "Designed by [designer name]," but I wouldn't give up equity for design services.
Here's what I'd do:
1) I'd start by sharing your story on every possible relevant social network in a non-sleazy, non-spammy way. This includes Reddit, Inbound.org, GrowthHackers, and anywhere else you can think of. It's important to understand how those sites work so you approach it in the right way and without coming off as spammy.
2) Next, I'd set up a KingSumo giveaway and offer a liftetime free package to anyone who signs up for the giveaway with extra signups for sharing. Play up the value of getting this service for life, and I'll be the first to sign up. Once you have this set up, reach out to every single internet marketing blog, expert, and Facebook page you can without annoying everyone. Come up with a list of people you think will be interested in the offer and reach out to them. This should get you to 3,000, but if not you can always advertise the giveaway on Facebook, Reddit, Tumblr, and other sites like these (maybe Twitter?). AdWords isn't necessary for this since you'll pay a premium.
I'm pretty sure both of these will get you to 3k while being under $10k, but if not you can always add in...
1) Facebook ads to advertise the free package.
2) Hiring a guest post writer to write posts for you on relevant sites with large audiences. If this is done right, I'm sure you can get to your goal with just this tactic alone so long as you use the right byline to advertise the free package and also target the right sites.
3) Sharing data and lessons is always a good idea. If you have any data/lessons you've gathered/learned from the product you can share those on the blog and then share the post around the web.
That's my quick list. If you focus on a few of these, you shouldn't have any trouble getting to 3k with a $10,000 budget.
There's no cons to this so long as the campaign converts, and it's something that's very common for PPC so no reason to feel bad about it.
The one thing Google doesn't allow is using a trademarked brand name in your copy, but you weren't planning on doing that anyway.
I'd set up a campaign in AdWords and name it Competitors so you can track it better and so you can decide how much money you want to dedicate to this campaign.
Something else to keep in mind is that this is the reason you should also bid on your own brand name. Why? So a competitor doesn't do it and then rank higher than your organic result with their ad (something I've written about here: http://blog.ispionage.com/bid-on-my-own-brand-terms-adwords.html).
Something else you can do is use a tool like iSpionage to swipe your competitors entire keyword list (disclosure: I work for iSpionage). These types of competitive intelligence tools give you access to the PPC terms your competitors are bidding on, the SEO terms they're ranking for, ad copy they're using, and landing page URLs to provide you with new, profitable keyword opportunities while also providing insights into the entire PPC strategy of your top competitors. You'll learn a lot, and it's a lot easier than starting every new campaign from scratch since you can start with keyword lists that are already working for competitors.
Feel free to message me if you have any questions about competitive intelligence strategies for PPC.