Adwords allows advertisers to also buy ads directly on the SERP page. If there isn't many advertisers for your niche the advertiser would probably prefer to advertise on the SERP page and not on sites that have the keyword on it. The advertisers know that when people are searching google they are looking for something specific. They know the traffic is 100% authentic. Compare that to a site with adsense on it where who knows where the traffic is coming from. Also works great for google since they are cutting the middle man out (us). Meanwhile all of us are working hard to get traffic to fight for what little scraps the advertisers decide to spend on adsense.
if you have a specific product or service with a good markup then the serp page is good for targeted traffic although it is expensive, if you dont have a product or service your selling then the content network is good for getting cheaper less targeted traffic
Right that seems like the only reason to go for the website based ads. Hence the reason I said, we are the ones left fighting for the scraps. All the big money is going to SERP based ads.
If one has a good dedicated website, then it would not be a bad idea to directly approach the advertisers as relying on google whose process is not transparent, you will not be doing justice to your efforts. Regards, RightMan