When I am setting up an Adsense custom channel and click on "target this ad for advertisers", there is a "description" box. Should I be entering a description on what my website is about, or entering where on by website the ad will be placed, or both? And how important is this description?
that description box is for site-targeted adwords ads... the advertiser sees it when they are considering your site... probably best to opt that custom channel in only when it has a tangible return for the advertiser, maybe for something like premium ad block placements.
that might be true if the custom channel you defined is for every page on the site. however, most people use custom channels for certain ad block placements, so it's not really about describing the site, it's about describing the ad placement on the site.
I found a very interesting "Webinar" web seminar from Google Adsense that explains in detail about this issue of ad targeting..... https://www.google.com/adsense/support/bin/answer.py?answer=22045&sourceid=aso&subid=ww-ww-et-resourcestab&medium=link then click on........ "Increase Your Visibility To Advertisers: November 29, 2006" It uses WebEx Player, but will download it for you.