Adobe has concluded that ads in PDFs don’t work (via TechCrunch). I agree that normal ads don’t work but the general idea still remains largely unexplored. One variation I think has more merit augments PDFs and e-books in general with helpful context-relevant links.
For example, a PDF report on recent stock market performance could have a sidebar that displays a list of links sorted by relevance to contents of the page displayed. Business model for this variation is the same as yellow pages which sells ad-spaces around fine-grained content with tight contextual constraint.
The key difference between the original idea and this variation is that the original idea attempts to leverage primary content directly where this variation attempts to raise the value of secondary content (page relevant links in sidebars) within which ads are weaved in appropriately.