They are effective at generating installs, otherwise publishers wouldn't be paying for them. Whether or not they are getting the type of install they want is up for debate though.
The more effective the ad model, the higher the price you can command, so banners are at the bottom end (being window dressing most people shut out) and incentivized video at the high end (being a rich media ad that the player opted into watching).
In general, only 1-2% of banner ads are clicked on, and 3-7% of interstitial ads are clicked on. From there, once somebody is on the product page, install rates are around 3-7% (being more based around how the game is positioned and pitched on the Store).
Thanks for the insight!