Gmail's image ads are contextually targeted, but it's unlikely that users will tolerate them well. After all, one of Gmail's selling points was that it only used relevant text ads. Here's Google's answer from 2005 to the question "What makes Gmail different?": "There are other differences in the way Gmail provides access to your email. For example, Gmail automatically groups an email and the replies to it as a conversation. That means you always see a message in its proper context. And there are no pop-ups or banner ads in Gmail, just relevant text ads and links to related pages". Google's explanation continues: "[Gmail ads] are small and unobtrusive. They don't fill half your screen and we don't make you read them just to get to your inbox. Ads are never inserted into the body text of either incoming or outgoing Gmail messages and you won't see any pop-ups or untargeted banner ads in Gmail."
It's interesting to see that a Gmail page about privacy explains that "showing relevant advertising offers more value to users than displaying random pop-ups or untargeted banner ads". The key words are "random" and "untargeted".
{ Thanks, Greg. }