With ad networks, I take it you mean contextual ad networks such as Google Adsense, Kontera, Bidvertiser, Google Adwords, Burst Media, TribalFusion and their like.
From the perspective of a publisher who uses ad networks to earn from advertising:
- The benefit of ad networks is that they have the size, leverage, sales people and manpower to do all the work of selling advertising for you.
- They manage all collection and billing
- They are able to attract big advertisers because of their leverage in terms of size given the number of publishers and the amount of pageviews they can serve
- You don’t have to worry about ad serving technology as they provide it, including geotargeting and other bells and whistles
From the perspective of an advertiser who uses an ad network to advertise:
- Allows the advertiser greater reach for their ad
- Has more robust ad serving tools that allow for better optimization of their campaigns
- Has stricter fraud measures in place to prevent click fraud (not eradicating the risk totally, but at least minimizing them)
- Allows you more option in terms of selection of where your ad will be placed

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