In the past we have already covered how to improve Adsense targeting, how to optimize Adsense units and what are the best positions to place your ads. Another feature that you can use to improve your overall earnings is the Competitive Ad Filter.
Google AdSense provides the functionality to block specific ads from appearing on your pages. Although Google ads are highly targeted to the content of your page, there may be situations in which you don’t want to display particular advertisements - for example, you may wish to block ads leading to competitors’ sites.
While Google defends that the Competitive Ad Filter could be used to avoid links to competitor sites you should be more concerned with smart pricing techniques from arbitrage sites. Those sites bid as low as $0.01 for clicks, reducing drastically your earning potential.
In order to block URLs you need to log into your Adsense account, click on the Adsense Setup tab and then click on Competitive Ad Filter. If you are not sure about what URLs to block you can check AdBlackList.com site, they keep updated lists of arbitrage sites.