How do banner tow planes coordinate with air traffic control?
An aircraft conducting a banner towing operation must have prior approval (written letters of authorization) from any ATC authority they will be conducting operations prior to the banner tow operation. A copy of this letter must be carried on board the aircraft. The local FSDO must also be involved (which will handle the 7711-2 application). 

The first thing you need to do is to file Form 7711-2 "Certificate of Waiver or Authorization Application" detailing all regulations which will be violated (minimum safe altitudes/separation, etc). 

From the INFORMATION FOR BANNER
TOW OPERATIONS FAA/FS-I-8700-1:


  
  Conduct all banner tow operations in VFR weather conditions defined by Title 14 of the Code of
  Federal Regulations (14 CFR) part 91, section 91.155. Operations shall be conducted only between
  the hours of official sunrise and official sunset.
  The certificate holder shall obtain the airport manager’s approval to conduct banner tow operations
  at each airport of intended operation. 
  Notify appropriate airport officials in advance when banner tow operations will be in close
  proximity to each non-towered airport. 
  
  
  ...
  
  Operations outside the geographic area of the issuing FSDO will be coordinated with the appropriate
  jurisdictional FSDO in advance and the operator will comply with all special provisions imposed by
  that office.