There is a current discussion about Optimizing AdSense that answers your question here: [webmasterworld.com...]

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Whew. When I saw the subject header I thought immediately of the toenail fungus ad. (If you have ever seen it, even once, you know the one I mean.) If ever there were an ad that could only work to the detriment of a site...
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@not2easy I was reading that thread before posting this query. But my question, I think, is a specific one with the prime focus on user experience getting impacted by misleading ads (and RPM in the long run by improving the quality of leads to advertisers).

@luch24 :) Did you block that ad? There is a slight difference between those kinds of ads and the ones I mentioned. Uninterested readers can shy away from those ads as they are unrelated to the topic and at least clear in what they are selling. Regarding the kinds of ads I am speaking about, a skimming user can potentially mistake that to be a part/extension of content (and it seems that the prime focus of such ads is exactly that).

If I spot ads like that on my sites I block both the ad and the advertiser.

Such ads work against the user experience and trustworthy image that I want for my sites. Any losses that result from blocking them, I view as an investment in longer-term reputation and growth.

Same thing, I block ad and advertiser. Hate seeing low-quality ads and I'm embarrassed my visitors get exposed to them too.

@buckworks and @CommandDork - I fully agree that user experience improves as a result of blocking low-quality ads. But can there be other advantages too?

For example, AdSense uses smart bidding [support.google.com...]
Seems the conversion rate of clicks can help boost RPM. The low-quality ads, especially misleading ones may not convert well like genuine ads. In those cases, will blocking such low-quality ads boost the quality of clicks and send positive signals to smart bidding algo? Have you experienced anything like that?

We regularly comb through our deliverables to check for such ads. When we see ads that read "Start" or "Download Now" or the like, the kind that are designed to look like navigation, or those ads that otherwise appear to dupe a user into thinking information they are seeking will be available via the link - this is in spite of the "advertisement" text both above and below all ads on our sites - we make CERTAIN to block the ads. In fact, we block all ads we believe are misleading, regardless of the quality of the creative, itself. In the context of this thread, specifically, we are talking about a creative that generally resembles operational elements of a site or browser. I find them infuriating, and if I wanted to "race to the bottom" in my efforts to take money, without a conscience of any kind, I can do a far better job than such lame-brained schemes as running unimaginative and deceptive ads that trigger downloads of spammy apps, software or other - likely - malware designed to track, spoof, spy or snoop. Yeah. We totally block those. Kinda should be a no-brainer, IMO.

I wonder how Google's ad review system allows these misleading ads. Or probably they do once in a while but not at the frequency of Search algorithm updates.

g deals with these AFTER the fact. They are not proactive BEFORE the fact.

Money first, deal with it later. (sigh)

Meanwhile, one needs to be alert and deal with this as soon as possible. After all, it is YOUR site which hopes to have a good reputation!

Don't do this, Google advises not too and will impact your revenue. I suspect if Google sees you doing this for a lot of ads in your account they will even further limit your inventory. You WILL get higher quality ads served over lower quality ones once your content and user experience improves. Case proven in my scenario.

I suspect if Google sees you doing this for a lot of ads in your account they will even further limit your inventory.

This is wrong.

Adsense is auction based. When you block ads you limit demand, when demand is reduced and supply remains constant then price drops. Blocking ads always reduces your income, and Google plays no part in it.

Also, Google Adsense doesn't limit your inventory. Inventory in terms of Adsense is the number of ad impressions, it is what determines the supply side of the equation. Counter-intuitively, blocking ads can indirectly cause an increase in supply, in that users are less annoyed by ads, thus they interact and share your content more which could be a positive signal to Google, which in turn may boost your rankings. But this is pretty far fetched and nearly impossible to actually attribute in any way.

Poor ad quality is symptom of low demand. Basically high quality advertiser are not bidding on your inventory leaving the quality advertiser the ability to buy your ad space. Given the auction dynamic, blocking those ads will simply result in worse ads and less money. There a two solution, increase the quality of your content to attract more users. Or reduce the number of ads on your pages in an attempt to reduce supply and increase prices. The problem with the later approach is that it is unlikely to make a big difference in terms of price, as there is plenty of inventory available on other sites so reducing inventory on your site will simply result in an offsetting loss in demand.

tldr: your damned if you do and damned if you don't!