In many respects, I think you're looking at two horses, each of different colour.
AdWords are primarily intended -- or, in my view, should be -- to drive traffic to your site and, on the whole, it's advisable to deselect the Content option. This is particularly the case unless your product/service has a very broad (e.g. nationwide) appeal.
In contrast, AdSense is meant to earn you money and, as far as I can tell, you're largely at Google's mercy as to which ads will show on your site.
All told, I've always thought that an AdSense program is -- or ought to be -- entirely separate from your AdWord one.
I've also found it interesting that, unlike all the advice available from such AdWord gurus as Perry Marshall, there's a scarcity of hints and tips about the way to make the most of AdSense. Maybe this translates into an opportunity for someone!
Duncan
PS. Admittedly, you can now have a hand in what happens if you do select the AdWords Content option, but the jury appears to be still out on how well, if at all, this recent option works.
It also isn't immediately clear -- to me at least -- as to what control, if any, you have as an AdSense user regarding which AdWord ads will end up on your site. (And please don't ask me to explain how the AdSense Search vs Content selection works!!)
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