The quality of user experience online is affected by the relevance and placement of advertisements. We propose a new system for selecting and displaying visual advertisements in image search result sets. Our method compares the visual similarity of candidate ads to the image search results and selects the most visually similar ad to be displayed. The method further selects an appropriate location in the displayed image grid to minimize the perceptual visual differences between the ad and its neighbors. We conduct an experiment with about 900 users and find that our proposed method provides significant improvement in the users' overall satisfaction with the image search experience, without diminishing the users' ability to see the ad or recall the advertised brand.