Is it ethical to host ads on an institute provided homepage?
It may depend on the rules of your institute, but I'd bet that putting ads on your homepage is not allowed.  You should certainly not put up ads without verifying that you have official permission to do so.

If you work at a public university or other governmental institute, then putting up ads could be considered using government property for personal gain.  That's probably not just unethical, but illegal (but you'd have to look into the appropriate laws in your jurisdiction to be sure).

If you work at a private university or institute, then it may not be illegal, but there are still probably institute rules against using institute property in this way.  I'd be surprised if any big organization didn't have such rules.