I think they can be useful to make names familiar - if you're generally inclined to vote D/R but don't follow local politics much, you're less likely to omit (or cross parties for) a local candidate from your party if you've seen their name in a bunch of places. There's also the social permission thing - lets you know that you're not the only person around who votes this way.

That being said, they come out way too early, are often larger + visually louder than they need to be, and the benefits of signs for statewide / federal races are harder to justify; nobody needs to read a sign to know who Ned (or for that matter Bob) is.