Fade effect is one of the most bytes-consuming ones...
What you can do is limiting the number of colors or frames with the fade effect.
A thing to consider -
vector only dynamic Flash banner. Vector artwork will be much lighter than the raster one.
A quick example I've Googled -
http://www.e-junkie.com/shop/product...Flag+Animation
This Flash vector animated flag is 11kb heavy - just imagine how big it would be if made as a GIF image... Most likely over 100kb or even more.
edit:
I've finally found the banner I was looking for:
http://www.softidentity.com/portfolio.php?id=62
Note how rich the animation is - and the banner has only... 31kb! - that's because it's made with the use of the vector only elements.