How Blocking Ad Categories Effects AdSense Revenue
Retargeting technology has made online advertising extremely efficient. These days, most internet users will be shown ads that are relevant to their lifestyle and interests. Yet, every once in a while, a user might see an ad that shocks, offends, or is just plain irrelevant. This can often be prevented by blocking ad categories.
Ad categories are essentially silo’s of ads that are organized by their subject matter. This allows Google to ensure they are serving the most relevant material to users visiting pages with Google ad tags on them.
Their Impact of AdSense Revenue
We’ve talked about the impact these ads could have on bounce rate before. Some ad categories by their very nature are sensitive. They include, but are not limited to – dating, religion, politics, gambling, black magic, cosmetic procedures and body modification, drugs and supplements, get rich quick, references to sex and sexuality, sexual reproductive health, weight loss and the list goes on!
Should You Block AdSense Ad Categories?
Online publishers have a choice to block ads from these and other categories from ever showing on their websites, but what’s the cost?
For publishers, choosing to block AdSense ads and other ads can have a significant impact on revenue. Blocked ads do not compete in the auction process on a website, and therefore won’t drive up potential earnings for that ad space.
Furthermore, advertisers whose ads you’ve blocked in the past may chose not to target your site again in the future. For this reason, Google recommends that you only block ads that you feel are unsuitable for your users.
Let’s take an example from the article “What Adsense Categories You Should Block” on howtonotmakemakemoneyonline.com.
How does blocking ad categories work?
“Let’s say you have 3 advertisers bidding to get a spot on the AdSense unit on your web page. Advertiser Three has a maximum bid of $2.00, Two has a maximum bid of $2.50 and One wins the ad auction by spending $2.51 even though they had a max bid price of $3.00. They only need to pay a little more than the next highest bidder.
Now let’s say you decided to block a general category that happens to be the category that Advertiser Two is in. The bidding looks like this:
Advertiser One wins the auction but this time only has to pay $2.01 to get the placement which costs you $0.50 in lost revenue. If instead you removed advertiser Three, you wouldn’t lose out on any revenue because Advertiser One would still have to outbid Two.” 
This example demonstrates how blocking advertisers can negatively affect the ad auctioning for your site. On the flip site, blocking ads can sometimes actually boost your income.
Blocking ad categories can boost your ad revenue
When ads are shown on your site that don’t spark a lot of interest from your users it can cost you. For example, if you run a site about investing and one advertiser keeps winning bids for ads on gambling, they likely won’t receive a lot of clicks despite the fact that they are driving up the prices in the auction. Blocking this advertiser could potentially allow new advertisers to enter the auction with ads that are more relevant to your site.
The good news is that you do not have to guess which categories you should block. Google provides details about the percentages of ad impressions and earnings for each category. If you find that one or more of the categories are serving for a large percentage of your total impressions, but the revenue is low, then you might want to consider blocking them.
Because Google makes this information available, we recommend that you avoid blocking ad categories until you know how they will perform on your site.
Some ads from the sensitive categories may be harmful to the message conveyed on your site, which you will definitely want to consider blocking. It’s best to practice close monitoring of your AdSense statistics, because as discussed, blocking categories can have an adverse effect on your earnings. Try and keep as many of the ‘right’ advertisers bidding on your impressions at all times!