First, take a look at this picture:

Once you have a set up like that, target the very top bandage (or whatever item you're using to space it) with the banner deed. The banner will be bumped up to the second level. Wait for the Death Robe to decay before you remove the tables and bandage..

Once the Death Robe decays the banner will be stuck at the second level and your banners will look sweet! Enjoy!

This particular stack of items only works on large towers. For other building types, you may have to experiment with different stacks. An easy way to place the banner slightly higher, simply stand in the spot you intend to place it, use the banner deed, and target yourself.