Things get tense when ad-supported companies have to make money. When I ask my mom or dad to click the first Google search result, they click on an ad. When I ask them if they realized that it was an ad, the response is "no". A good portion of the ad business is confused clicks/taps (it's worse on mobile).
As someone who has worked on all three sides of the equation (selling ad space, brokering ad space, and buying ad space), I can tell you wholeheartedly that ad purchasing companies do not want these clicks. They're paying for something of no value.
I don't know how companies can be convinced to do ad placements like these, or if they simply rely on getting enough conversions from accidental clicks from unknowing users to make out in the end.
Either way, it's a bad practice and something I'd equate with a torrent site or rapidshare.
Ads like this are typically bid on on a CPC basis. Shaky grandpas who click ads on accident and don't convert drive down the cost of the clicks. If you assume shaky grandpas account for 50% of the clicks, and 0 convert, then they'll make the CPC worth half what it would have been without shaky grandpas. As a result advertisers will bid half as much and pay half as much as CPCs. Just like click fraud, unless it's an orchestrated attack on one specific company, it comes out in the wash.
In the end, the advertisers don't really care (at least if they understand the math, which many don't). They care only about their ROI. If they pay 20 cents a click and make 40 they're happy, if not they aren't. Sure you could perhaps get rid of all the shaky grandpas, pay 40 cents a click, and make 80, but it's the same ROI.
What you really end up with is a cottage industry of people making websites that can convert shaky grandpas better than real advertisers because just like spam, some non-zero percentage do convert. That's why you see some stupid ID fraud ad there. Shaky grandpas are terrified of the evil hacker who wants to steal their identity.
Well, from yahoo's perspective it's 10k clicks at 40 cents cpc vs 20k clicks at 20 cents on the same number of impressions. From the advertiser's it's which do you buy, and the latter is almost certainly preferable since some number of shaky grandpas will convert.
I think shaky grandpa should be the internet standard term for worthless clicks.
A lot of products are targeted at confused and befuddled people. The "Protect Your Identity" ad could be an ad for one of those, in which case Yahoo's optimization process has placed it very well.
Unlike the ad in the article, Adword ads are usually highly relevant because they often capture the same intent as the first organic result (if done right).
My senses have now been trained to ignored those first few 'results'. Similarly, sites like kijiji, autotrader, etc. where people pay to have their posting moved to the top, I usually skip over those ones.
It seems pretty unlikely that the highest bid ad is as good as the #1 organic search result for the same click. As advertisers get more savvy, these ads generally go to landing pages (limited navigation, tight funnel). In the rare case that the #1 ad is better than the #1 organic result, you're right-- it doesn't matter. The other 99% of the time, it does.
Google and other ads are specifically designed to look like search results and exploit the fact that older people cannot see contrast of the background as well as younger people.
The contrast on the background is much lower than the federal 508 standard for contrast and I think has changed to over the years to a lighter shade as Google "optimizes" it.
One is an ad and one is a search result, is there much difference? Given the average quality of monitors, I think those are designed to fool even otherwise sharp eyes.
As has been mentioned in other posts above, it seems doubtful that ad companies (at least large ones) want these ads to be deliberately misleading.
If you click on an ad that isn't relevant to you, there are three major harms caused. One, your time is wasted closing it and going back. Two, the advertiser may have to pay extra for a useless click. Three, Google (for instance) has to consider the likelihood that this is a useless or fradulent click, and possibly reimburse the advertiser if so.[1]
All of these are bad for Google (for example). The offset gained by a few dollars in revenue is probably not going to counter that, because what they really want is users to continue using their search engine and they want advertisers to be happy with the clicks they pay for. Those are really important for them to keep. Tricking you into clicking useless links is bad, bad, bad. (Adwords hosted on someone's website is another story; that person might not feel the same way.)
But if, on the other hand, the ad actually is relevant to you, then it's great for all three parties if you click it. So I'd hesitate to attribute these UI choices to trying to fool people.
Disclaimer: I can't remember the last time I clicked on an ad anywhere on the internet, except by accident. But that doesn't happen to me on Google or other reputable advertising-based sites.
I bet it's related to the angle of people's screens: my laptop's screen is not directly pointing at me, and the samples in your screenshot are nearly indistinguishable from one another -- but is very visible when I move it to my primary screen which is at a different viewing angle. I first noticed the issue when I was looking at a graph with a watermark, and the watermark was more visible than the graph (until I looked at it on my second screen), so I'm sure it's relatively common.
On a CRT this isn't a problem, but I imagine that many people have their LCDs at an angle which isn't perfect for viewing such contrast differences ... and if a user (like my parents) are not as accustomed to playing "spot (and ignore) the ad" based on content as we are, then they might completely miss the visual cues as well.
Also, age is big differentiator for seeing contrast.
Getting people to click on the ad instead of the search result makes Google about $20 per click because of the keyword, so no wonder it's designed to be almost invisible.
