Naturally, youâ€™d never expect an AdSense ad of a site to appear on itself. But this I just encountered, indicates an inherent *bug* of AdWords.
Or is it? But Iâ€™ll never understand otherwise. Whatâ€™s the point? Maybe thereâ€™s an option for the AdWords advertiser to opt out of his advertisement listing being published on his very own site with AdSense on, but canâ€™t Google just do it automatically. My other guess is that for a very large community site such as a popular forum, there are people (who are members of the community) who wants to advertise to the very audience (mostly members) of the site, sets up a campaign via AdWords targeting them and puts the ad exclusively on the site which is also targeted a part of it.
Anyway, I believe Google should automatically turn this off by default and let the advertiser himself to explicitly turn it on.