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Google AdSense: Understanding Alternate Ads and PSAs

We all know that Google AdSense works by serving targeted Ads to the websites that are enrolled with the Google AdSense program. However, there are instances when no targeted Ads are available for a website e.g. the website might be catering to such a topic or subject for which no relevant Ads/advertisers are available. In such a case, Google serves alternate Ads i.e. content of your choice. If you have not specified any content as Alternate Ads, Google AdSense program treats PSAs i.e. public service Ads as alternate Ads and serves them on your website. These PSAs are charitable Ads that don’t contribute to your revenue. So, unless you are looking to do charity (which could mean lessening of revenue for you), you must specify Alternate Ads upfront.
Here are the options that you have for alternate Ads (your choice of content):

Color: A number of people use color for alternate Ads. This involves specifying a valid hexadecimal color code (or you can choose from the color palette provided by Google) for the alternate ad. The choice of color would be such that the ad becomes invisible. This is easily achieved by setting the color of the ad same as the background color of the page.

Image: An image can also be used as an alternate ad. You can either have this image link to some other web page (in such a case you will need to specify an html as alternate ad) or you may just use it as such (for, maybe, enhancing the beauty of your web page).
Another good option is to use ‘Collapsing ad units’. ‘Collapsing ad units’ code will squeeze the ad units that are not utilized (instead of showing the PSAs) on your website. This approach helps in giving a cleaner look to the web page (since the blank areas or non-ad-based images are done away with). It also helps in bringing more emphasis to the AdSense Ads that are displayed on the website.