Over the years literally millions of parked domains (domains that have been purchased but show now real, unique, original, or valuable content) have emerged only to show ads. Owners purchase these domains because they either contain common keywords they hope searchers will stumble upon or misspelled words they hope searchers will accidentally type instead of the correct URL.
So, owners figured out that selling ads on these domains was a great way to redirect ad revenue from other sites (and Google) to their pockets.
This has long been to the disdain of both searchers but more so the advertisers who feel the clicks are often of a lesser quality than other sources.
Through my own dealings I have found that the better quality content farms that serve ads generally provide about the same or slightly less quality traffic and that we tend to continue to advertise on those sites. However, content aggregate sites that simply repost our content or stories about my clients tend not to get much traffic and that traffic doesn’t produce results, so we typically block those sites as they are discovered. However, parked domains, especially ones similar to common search phrases actually perform on par with many of our other search network sites. This is most likely because our ad matches what they were looking for due to the keyword contextual matching that the domain and Google are using to serve up the ads to the parked site.
This recent case requiring Google to reveal some of the algorithms it uses to price and serve these ads may shed further light on the situation. However, the plaintiff is making a big mistake in pursuing this case in my opinion. They can simply block their ads from showing on these sites if they use some analysis proactively to determine conversion value. If so, they could quickly block their ads from under performing sites. While this is reactive, it is still effective in reducing poor click quality.
Dan Soschin 