Mobile ads are not the means to acquire new customers. Relationships with review sites, blogs, and other media outlets is your best bet. A good review can get you some pretty good uptake. We got reviewed in several Android blogs and reached 18k downloads in a little under a week (our app was free).
I haven't experimented much with mobile ads primarily because they aren't effective and won't ever be effective. At least, that's what the studies say :).
Link?! My preparation for Admob was admittedly limited to one or two google searches and a scan of a few blog posts, but I would love to read more if you would link to said studies.
We got written up in Thrillist boston, Phandroid, Androinica, Droid-Life, TalkAndroid, and Gizmodo. From all of these review sites we reached roughly ~18k downloads in a week (our product is a fantasy football app).
While the majority of those downloads came from Gizmodo, we definitely would not have been able to get there without being written up on all the other blogs.
From those 18k downloads, we averaged about 11k active through the first 3 weeks of the application and it steadily declined after that (assuming that they were bored of their fantasy league or moved on to another app).
The thought behind the reviewers is if its a source that is trustworthy or has built a following, their post/review is more meaningful than an ad. These reviewers are an AMAZING source of word of mouth for app developers while an ad is simply a pay to click.
If you want to see a chart of our downloads over time, I'd be more than willing to share to show you the value of these relationships as opposed to a one and done ad campaign :).