I think I'll be able to attract web publishers just fine, however attracting advertisers will be a lot harder. Does anyone have any tips on attracting advertisers?
A client started one for local businesses and it's been an uphill battle. He required advertisers to be publishers as it seemed a good model to build both sides. Ofcourse different people have different site sizes and traffic - but it was closer to an adsense/adwords program than a banner exchange. You will need to have a solid reputation for payment to attract new advertisers. Once you acheive critical mass you should be fine. However part of your startup cost may well be giving free advertising while still paying publishers. Have a look at what surch.com are doing - they're adding PPC to their offering.
you need good contacts and advertisers who would be willing to trust your network. there are more of odds then even to start this service, but if you are sure you can succed go ahead ,
The difficult thing is that your dealing with whats called a network good in economics. It will be easier to attract advertisers when you have lots of publishers and easier to attract publishers when you have lots of advertisers. Its the same reason why its so hard to compete with ebay etc. If you think you can get publishers, I'd suggest getting them signed up and ready to put the ads on the site, then tell advertisers you've got xxxx sites ready and they'll be more inclined to try you out. There are a few more strategies but you should read up on network goods to make sure you know what you're getting into. Its definatly an uphill battle.