Google Adwords' Exclusion Feature
An important feature of Google's Adwords is the ability to exclude specific web sites from showing your ads. If you ads appear on inappropriate web sites it can hurt you in two ways.
1) People who have no interest in your product will be clicking on your ad. You pay for the ad, but don't get a qualified customer or lead.
For example, I'm managing an Adwords account that promotes an industrial printer used to make posters. This is not the type of machine used at home. Shortly after starting the ad I noticed in the log files that the ad was getting a lot of clicks from a Curt Kobain (Nirvana) web site. The ad offered a free sample poster and the Nirvana fans were clicking on the ad and costing the advertiser $30-$40 per day in worthless clicks. I added the site to the exclusion list and the cost of that ad dropped substantially.
My guess is that the operators of the Curt Kobain web site may have also noticed a drop in their Adsense income. It probably decreased by about $200 a week. I regularly read messages from people using Adsense who are complaining that their Adsense revenue just had a sharp decline. One possibility is that a wrongly targeted ad (or two or three), that had been earning them a lot of money, was no longer being shown on their web site.
2) Your ad will be shown to people who are not interested in your product and they will not click on your ad, this will reduce your click-thru rate if the site is being shown on the Google network. A lower click-through rate may result in your costs for the ad going up. Although Google does not count low click-thru rates against your content ads, it does hurt you for search ads... and non-Google search ads are still shown on the syndicated Google network and thus are included as a part of your search statistics.
How do you exclude web sites from showing your ad? Go to the Campaign Summary screen and click on the "edit" link for "Excluded Sites".
How do you know what sites to exclude? You need to be tracking who comes to your landing pages and where they come from. All the landing pages I use are PHP pages, and they log all the important information for each visitor.