I tried the search ads for the first week and a half they were available. I spent about $8 and only had about 20 vieiws, a couple of new hearts and no sales ... so I'm not convinced they work.
But if you're determined to try the search ads, I'd suggested more targeted keywords. Having "blue" as a keyword, for example, carries the possibility that your item will receive an impression if someone searches for blue dress, blue shoes, blue onesie, blue picture, and so on ...
Here's the list of Etsy search ad keywords:
http://www.etsy.com/search-ads/keywords. If there's a word or phrase on that list that you'd like to be able to use, just add it as one of your tags and it should become a keyword for you!
Etsy charges per impression, which means every thousand times your ad is shown, it costs the amount shown on the keyword list above. You're charged even if nobody clicks on your ad.
You can edit your search ad keywords during the time you're paying for the search ads. If you're advertising specific items, you can change the items too! You can even change from specific items to your entire shop or a particular section. The changes always start the next morning at 8am Etsy time. And if you decide to quit the ads before the week is over, you can do that too, effective the next day at 8am Etsy time.
Hope this helps!
