Yes they work ... sometimes on many levels.
Right at this moment there is an advertizement for "Puzzle Pirates" at the top of my screen; personally, I'm not interested but I know of several people who would click on the banner in order to (at least) find out more about the game to see if they're interested.
Their second function (as has already been mentioned) is they increase awareness about a product (in this case a game). Over time you become familiar with these products even without using them, and this makes it much more likely that you'll notice when someone talks about it (which makes you more likely to use it).
The final reality is that people are indeed dumb enough to believe that a pill will 'magically' increase their penis size to 16 inches, regrow hair, help lose fat (well, the penis growth would have to come from some where) and keep away dragons; and dozens of other claims. "Street Smarts" are not just about the "Streets" ... people become aware of the dangers of the world they live in from making (or watching people make) mistakes and learning from them; people who have not used the internet for a long period of time,are dumb, or are naive are easily tricked because they do not understand how easy it is to make something look legitimate and do not have the instinct to know the difference between legitimate and fake sites.
