[BirdOPrey5]

No the ads don't shut off by default, you have a few options though... The easiest I think would be wrap your ads in "If" statements and not show them to your premium usergroups...

For example in the navbar template find:

$ad_location[ad_navbar_below]

Replace with:

<if condition="is_member_of($vbulletin->userinfo, 20, 21)">
<else />
$ad_location[ad_navbar_below]
</if>

That code will display nothing (no ad) to members of usergroups # 20 and 21, but show the add to everyone else. In my example group numbers 20 and 21 are paid membership groups, for your forum the numbers will be different. Go to your usergroup manager to get the number of each group.

Put those IF statements around all/any ads you want to block... You can add or remove as many group numbers as you want, just keep a comma between them... so the following are all valid:
<if condition="is_member_of($vbulletin->userinfo, 20, 21)">
<if condition="is_member_of($vbulletin->userinfo, 21)">
<if condition="is_member_of($vbulletin->userinfo, 5, 6, 7, 20, 21)">