According to the New York Public Library's Digital Gallery site, art posters were invented in 1893 by Edward Penfield. He created an advertisement for an issue of Harper's that focused more on the graphic components than the textual. This led to a greater emphasis of the artistic elements of movie posters, newspaper illustrations, and book covers.
By the 1900s, leather-bound books with plain-text covers were already being replaced by intricate hand-drawn images. The same goes for book advertisements: Although still a long way off from the comical Jeffery Eugenides billboard in Time Square to announce the release of "The Marriage Plot," these illustrations were captivating works of art in their own right.
Check out the New York Public Library's collection of American book ads created between 1895 and 1911: