That is what I would also recomend. Target a few specific companies to sponsor you. Those general banner ad systems are not like they used to be, it is hard to make anything off them.
Since my site is fairly local, I have talked to a few businesses in the state and we may be working out a small ad campaign on the index page, offer them a little button/banner in return for a monthly fee.
Unless the site is huge with a wide variety of users most generic ads won't do much good, so if they can be targeted they will be much more effective and people will be willing to pay you for the ad