What do you do when you need a banner to advertise your product?
Design it yourself, hire a local designer or use some design services on the web?
What do you recommend for a small company with a tight budget?
Unless you have graphic design and advertising creative experience, it'd be worthwhile having someone else do it. You can use a local company, but we've found a lot of success with 99designs: http://99designs.com/users/317302. Most of thoes banners ended up costing around $200, which is much less than a local designer.
Whatever route you go, consider the following:
Keeping these in mind, you can avoid a lot of mistakes such as having your company logo be big and prominent.
Do not forget to plan the banner campaign with more than one graphical option.
If you run the site where the banners will be shown, use A/B testing or just ask to the content site to provide you with as real time statistics as they can.
Edited to add this URL that can be useful for you to play with your ideas.