Wikimedia Foundation projects do not carry advertisements, and should not. But there is nothing preventing Wikimedia from running advertisements, is there?
Many Wikimedians blog or have personal websites which carry ads, ranging from relatively inconsequential text ads to full-on flash banners; some may actually be breaking even or turning a profit. It's clear from their use across the internet that advertising is a successful method of getting messages out, and many content providers are interested in carrying not-evil advertising.
There are open source ad serving software available, such as en:PhpAdsNew, which allow management of advertisements, ad campaigns, and publishers. Using such a tool Wikimedia could provide advertisments to publishers who may not be able to support the Wikimedia Foundation financially, but are willing to give the projects space on their websites.
These advertisement can be used to increase internet awareness of smaller Projects, to spread the word within a language about Wikipedia/Wiktionary/other projects in that language, and to spread awareness of Wikimedia Fund drives when they occur. There are hundreds of ways in which web ads might be used to expand Wikimedia's reach, and work to achieve the Foundation's goals.
A test example 
Working with a small collection of text ads created by en.Wikinews contributors and space/bandwidth from Journowiki, a pilot project has been started which serves ads. One site was set up to provide a test 1, but two more have asked to be allowed to carry the ads. 2, 3.
The initial campaign was created for en.Wikinews using exclusively simple text ads. This involved creating an "advertiser" account, which can then create ad campaigns, and then add banners to each campaign.
Each person or group carrying ads on their websites gets a "publisher" account. The publisher creates "zones", which are lists of advertisements and campaigns which they are subscribing to carry. Each zone creates an invocation code segment to be included in their websites, which contacts the adserver to retrieve an ad which is selected randomly.
What are some of the goals? 
The primary goal is to increase traffic to Wikimedia Foundation fundraising and donations pages, under the assumption that increased traffic will lead to increased donations.
A secondary goal is to increase internet awareness of Foundations projects, especially those which are not so well known as Wikipedia and increasing awareness of projects in languages other than English.
Toss out your ideas of how to use advertising, how to gain publishers, or ideas for ads you'd be willing to help create.
- One thing that immediately comes to mind are buttons anyone of us can use - like "see my wikipedia user page" - "see my contributions on wikipedia/wiktionary or whatever project". These could then be used on homepages, blogs etc. and this would increase traffic to the various projects.
- Another thingie: Banners - I have some to other free projects on my portal - it would make sense to have them somewhere at disposal so at least one could link within the ordinary banner cycle to whatever wikimedia project.
- Have partners that contribute in contents and with members (I am not talking about single people, but organisations, networks etc.) mentioned thanks to their efforts.
- If some more come up I will let you know. --Sabine 19:57, 15 January 2006 (UTC)
- <hmms> So
- some static ads (a basic template which a user can modify to point to their user page, contributions, etc.)
- Banner ads from all projects. Yes! Publishers (people who are hosting the ads on their website/blog) can select to have ads cycling in from any campaign, or a specific list of ads, or a variety of other ways to choose ads. First we have to create those ads, of course. See the talk page to create a subpage for your favourite projects! (Yes, we should do ads in multiple languages to support the specific language of each project.)
- WMF ads can certainly include thank-you ads; they can be built to link to multiple locations so we can have links to the supporter's pages, or to a WMF page showing their support, as well as to a donation/fundraising page. This could even be automated. - Amgine / talk meta 21:04, 15 January 2006 (UTC)
- <hmms> So
random, anonymous thoughts: Wikimedia has two options in regards to advertising: buy adspace, or sell adspace. Wikimedia should buy adspace. This will lead to an increase in traffic to Wikimedia, and related projects. Wikimedia should sell adspace. This will lead to an increase in revenue to Wikimedia, and related projects. I fully expect the Board of Directors will eventually initiate an advertising department, and will exhibit an appropriate degree of discrimination in selecting their ad-partners.
Or is the BoD opposed to any kind of advertising? Is it up to the editors to do their own advertising? How about starting an all-volunteer Advertising Project? ads.wikia.com?