Google Chief Exec Eric Schmidt and his fellow media moguls talked to the Wall Street Journal last week about their plans to get creative with online advertising. After fifteen years as a part of the Internet landscape, the banner ad simply isn’t as effective as it used to be and though online ad spending is up again, it’s not where it should be given the amount of time the average person spends online.

Last week, Schmidt and colleagues, Mark Zuckerberg of Facebook, Jeff Bewkes of Time Warner, Walt Disney’s Bob Iger and Groupon’s Andrew Mason, headed out to Sun Valley for this year’s Allen & Co. mogul retreat.  In between the bike rides and the barbeques, the heavy hitters discussed “interactive video ads” and targeted advertising attached to content. The Wall Street Journal reports:

“Schmidt championed “interactive video ads,” which he said are on the way. That means they could allow Web users to watch a video, leave a comment and see real-time updates within the ads that are more customized to their interests.”

“Groupon’s strategy is to let businesses design an offer, such as half-price theater tickets, and email it to consumers together with commentary, such as a review of the play.”

So it looks like the big guys have finally realized that content trumps a dancing hamster when it comes to attracting click-throughs. And for those who complain about the rampant spread of Google ads all over the net, Google says they’re working on that, too. In other words, they’re working on new ways to hide advertising in what looks like content.

Are banner ads a thing of the past? Is it time to eliminate the standard Adsense ad unit in favor of targeted, advertising embedded in content? Or would you prefer to give up your sidebars in order to enjoy your content without commercials? Let us know in the comments below.