(Abhishek Uppal, Piper Jaffray Investment Banking; Reference to The User Revolution)
The ad networks typically take on one of three business models: dynamic network, the traditional ad-network, and ad representation.
Dynamic Network Model
Under this model, the ad network will buy inventory from the publisher¡¯s sites in advance at a specified rate, group the inventory and select the best types for each advertiser, and resell the inventory to an advertiser or agency at a higher price. Given that there are no assurances this inventory can be resold or resold at a profit, this model presents the most risk for the ad network. The ad networks under this model may obtain preferential inventory from the publishers as the ad network guarantees payment. These networks include Advertising.com and DrivePM (owned by aQuantive). While the lead generation companies often use the at-risk model as well, do not consider them a pure ad network model as they typically buy inventory from wherever they can (including email and search) in order to drive leads with little value-add in the process.