It refers to the space available for advertisements on a web page.

When web design was still in its infancy, ad space wasn’t considered a major factor. Today, the scenario has changed. It is now a major factor for ad revenues for a number of sites on the web. The real challenge in using these ad spaces is to make the most out of each visitor visiting the web page. Ad spaces traditionally included spaces for banners and buttons on all sides. It now includes spaces for rectangle ads and skyscraper ads as well. This has been made largely possible due to the experimentation on different sizes for ads from different publishers.