make good use of free publicity - Libraries, tourist offices, radio, and get the artists themselves to announce it at their gigs, give them handouts.
for the Upton FF (year 2) here I had Sweat & T shirts printed 9 months in advance and a lot of people noticed commented it was a bit early, to which we replied - well it worked on you!
I got a rubber stamp made and even stamped-up beer mats (use web offset ink and a roller), it is the novelty value and some of the efforts were indicative of a bigger festival than it was - in short, credibility.
This thread was a good start!