add new template, give it a name like block_custom_sidebar_ad
block templates > block_custom_sidebar_ad
you'd have to then create the block as html & wrap the code to use the custom template above.
The current block is HTML, and it's template consists of nothing but,
Code:
{vb:raw content}
Without {vb:raw content} in there, nothing will display. I'm not sure I understand- is there something additional that needs to go in the template? Or in the block's code? What needs to go there?