With all the focus on graphic ads these days, you'd think that the text ads beside or above search engine results pages (SERPs) were losing their effect and appeal. In reality, they're still performing strong for those using them consistently.
While using more graphic advertising on SERPs is nothing new, Google (GOOG) has been trying different things with it over the last year, although it's not catching on near as quickly as some had thought.
Some of the reasons are that banners are either irritating to viewers or completely ignored. Their value is in branding more than anything else at this time.
Another reason it's not catching on quickly is they are more labor-intensive to maintain and market and can very quickly "upset the highly-profitable cost 
structure of highly-automated search engine machines like Google and Yahoo! (YHOO)." They are also more expensive to make and not as easy to test and optimize as text-based advertising is.
With the cost of graphic advertising at this time, it makes it difficult to get a good ROI after creating a variety of graphical ads for SERPs as you can with text advertising.
For example, if you tried six variations on a text-based ads three key elements: the title, copy and URL, it wouldn't be difficult, even though it would include 216 variations for a single advertisement. For graphics it could be a nightmare with testing only one campaign potentially costing the entire budget. Graphics aren't going to change the SERPs ads anytime soon.
Tig Tillinghast, CEO of Watershed Publishing, a B2B publishing company that owns MarketingVOX and other sites says concerning this issue that there should be two directions that improvement in this area will take. The first one will be targeting the niche audiences much better than is currently being done.
For the second way he says, "The other way I see improvement is through more of a winnowing process for media and creative. As more inventory is converted to display and flash ads, those who are capable of being iterative and flexible with that creative will offer advertisers a great advantage."
It's good to hear others talk about these things as we've talked here at thealphamarketer for a long time about the niche advantage, and it shows again why that's so.
The bottom line at this time is that text-based ads will still rule SERPs for a long time to come. But we will see a slowly growing foray into the graphic as companies try to gain an advantage in that space. It's going to take some time to happen.
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