AdSense for Domains is used with domain names that don't have any content. These are "parked domains", which are just live domain names with no websites attached to them.
Normally when you register a domain name, your domain registrar will display a "Coming Soon" page if you were to type that domain into your browser. AdSense for Domains lets you replace that page with one that makes money for you.
Like most publishers, I have several domain names I registered that I never developed. These domains were ideas that I thought were good at the time, but eventually I lost interest. Just recently, I pointed them to AdSense for Domains.
And I'm suprised to say that I'm making some decent money from it. It's not huge money, but over the course of a month, it amounts to something that makes me say, "Hmmm" and wonder if I should explore it further.
Google's program policies forbids me from telling you how much I'm earning, so I can't give you that level of detail. And AdSense for Domains specifically forbids me from promoting those domain names, linking to them, or referring traffic to them. So, I can't tell you which domain names they are.
The Best Way to Make Money from AdSense for Domains
In short, it's the expired domains that make all the money. These are the domains that used to have websites, used to publish content, and had attracted inbound links from other websites. For whatever reasons, the publishers of these domains decided to abandon them and let them expire.
All major domain registrars have tools to find expired domains. Afternic is a service that specializes in expired domain name sales.
Interestingly, AdSense for Domains appears to monetize these domains through display advertising (CPM). I haven't yet attracted any clicks on these domains; all the money I've earned thus far came from the impressions.
And the traffic I've received is not very much. According to AdSense's reports, it's only two of my domains that are making all the money, with one domain generating about 50-75 impressions per day, and the other about 25-40 impressions. And those two domains happen to be expired domains that I bought. The other domains I have in this program were ones I bought brand new and they haven't earned anything.
The CPM rates are very high, too.
My advice is to register expired domains that used to host content. You can check this on the Wayback Machine.
I'd suggest not spending anymore than $500.00 on an expired domain name. Assuming that domain name used to host a website and had gathered some inbound links from relatively popular websites, it's reasonable to expect AdSense for Domains to earn you about $300.00 to $500.00 a year, per domain.
If you have a website that you've let run stale, and are thinking of dumping it, then just park it on AdSense for Domains. I have a few of these websites myself. The CPM rates I'm earning from two of my expired domains seems high enough, that my stale websites could make more money from AdSense for Domains than with AdSense for Content.
But before you do this, make sure to remove inbound links from your other websites. AdSense's program policies forbids you from linking to your domains. But obviously, it's OK if other publishers are linking to it.
Improving AdSense for Domains Earnings
AdSense for Domains lets you change the colors of ads. I'm not sure if this really helps or not, since much of the revenue is based on CPM than CPC.
You can also specify keywords for each domain, to generate relevant ads.
But the best way to maximize earnings is to find expired domains with lots of backlinks pointing to them.