An alternate ad is an ad displayed when an ad network can’t deliver a paid ad. It could be for brand safety reasons or other reasons. On CPM based networks, an alternate ad may be useful if the network has no advertisers above the CPM threshold fixed by the publisher.
Usually the alternate ad is a HTML file created by the publisher which contains an image (in house ad) or an ad tag from another network. The publisher point to that file in his publisher account.
Creation of an alternate ad:
How the Google Adsense tag is completed by an alternate ad creation:
google_ad_client = "client_id";
google_alternate_ad_url = "http://www.domain.com/alternatead.html";
google_ad_width = 120;
google_ad_height = 600;
google_ad_format = "120x600_as"
Alternate ad creation on another network: