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[edited by: Marcia at 8:14 pm (utc) on Nov. 12, 2002]
I would expect that the images/logos work very well. My experience suggests that people click on what they recognise, so if they see a brand logo next to a search result they are more likely to click on it.
There is also the branding value of the adverts. Even if a person doesn't click on your PPC ad, they may still see your logo and remember it.