I agree with icebraining that it's not necessarily dumb for a business to advertise on less known or even irrelevant websites. It's the same difference between an ad flashing on a video wall on Time Square, or a billboard along a busy highway, or a poster hanging in a mall. Each has a different reach and purpose and with that comes a different price.

Google gives you the choice where you want your ads to be displayed; whether it's within the Google search results, or on websites like yours, or there are programs like Google Doubleclick where you can chose which websites you want to display your ads.

I think most of the criticism here doesn't so much reflect the ignorance of advertisers like the parent comment says, but ignorance of the people commenting how advertising works.