If you were publishing a newspaper, you wouldn't care who read it. As long as the number of readers was nice and high, it wouldn't matter too much to you whether they all read one article or absorbed everything from cover to cover.
That would be true even if you were publishing a free newspaper.
You'd just want know how many people your publication reaches so that you can charge advertisers the right price.
Online, things are a little different. Although you do want your traffic levels to be as high as possible, not all users are worth the same to you or to your advertisers.
It all comes down to your traffic sources. If you have a link on a site that's not closely connected with the topic of your blog -- or one whose users tend not to click ads -- you might generate lots of impressions but very few clickthroughs.
No tinkering with placement or formats is going to change that. Some users just don't click ads.
Digg.com, for example, is famous among publishers for shooting up page views but having little effect on ad clicks.
One way to get around that problem is to also put CPM ads on your site. Because they pay per every thousand impressions, even if a site is bringing you traffic with a very low clickthrough rate, you'll still earn something from them.
But even that might not be a solution. Advertisers can see where the impressions were made and often pay lower rates for people outside the United States. Users located in some countries are even worth nothing to them at all and they won't count towards your total ad impressions.
That's why when you're looking at your impressions and your clickthrough rate it's important to consider not just your traffic levels and your AdSense optimization, but also the quality of your traffic. Sometimes, you can improve your revenues more with better traffic targeting than you can by repositioning your ads.

September 15, 2008 12:35 PM
Another trick is to use PHP to determine the incoming traffic is coming from.
I had this problem with StumbleUpon and did the PHP thing.
Whereas my CTR was way below average for my site (can't reveal specifics), putting the PHP thing brought CTR back by not showing ads to StumbleUpon visitors.
September 15, 2008 06:32 PM
There is also another problem, and that is Firefox users who use a certain extension. I have a love/hate relationship with this extension, the web surfer loves it, the webmaster hates it. I'm not going to name it, because I really don't want even more people using it. But I have found this to be a problem because you get the traffic, but no impressions.
September 20, 2008 06:39 PM
This is incredibly important as I have learned the hard way and it has cost me. I have discovered that I have a lot of traffic cominig to my site http://friendpad.com, its a free dating site, and they are coming from countries like nigeria, senegal, etc. which are basically worthless. Well before I found this out, I have had Google cancel my Adsense account twice and although they will not admit this, I am pretty sure this is why they canceled my account.
See my blog at : http://friendpad.wordpress.com/2008/09/09/google-adsense-sucks/
Drew
September 23, 2008 03:01 AM
Quality of traffic is important for the advertisers. Drew, do you have installed ip/country blocking filters on your site? The reason you are getting so much "low value traffic" is propably because you are not blocking it. There are several good blocking solutins for your website on the net that you can use, I am sure that will reduce your hedache conciderably.
September 23, 2008 09:29 AM
Yes.... I am already a step ahead of you ... I have integrated an IP to Country lookup in my site to block a variety of countries.
See the following blog post for more:
http://friendpad.wordpress.com/2008/09/10/blocking-countries-by-ip-address/
I am using a company called http://www.ip2location.com.
They are not perfect but they seem to get most cases ... What do you guys think about this company?