If local merchants want to advertise on a local classifieds site, an in-house banner advertising system run by the site is much more attractive to them than bothering with adsense. Plus, many users are turned off by Adsense to the point that the ads are either blocked or subconsciously ignored. A good solution for advertising to feature and promote local business is a banner ad manager for the users. Admin can create ad packages and zones (e.g. 250x250, zone 1, sidebar) and configure the cost of the ad package based on either flat-rate monthly subscription (Paypal), total impressions, or cost per click. So when user signs up they choose the ad package they want and then upload banners through the banner ad manager UI. User/advertiser can see ad stats (impressions, CTR, etc) edit/delete/upload banners all from the osclass user dashboard when logged in. Icing on the cake would be a "banner ad creator" where user can have an online banner ad creation tool to make it easy to create ads, coupons, promotions on the fly.
Would you use such a plugin?
p.s. here is an affordable decent looking banner ad manager script I found while researching that does the kind of thing that I'm explaining above. There is also a "Plus" version of it.
http://www.softbizscripts.com/banner-ads-management-script-features.php
