Wait, are they buying AdWords and then putting Google Ads on the pages that people land on? Does that make any sense? Does Google pay out for those impressions?
This practice is called arbitrage and can actually make money. I know a few people that live of this.
It's against the TOS of almost any ad serving company but that doesn't mean it does not happen. (which is interesting, because you'd think it would be very easy to detect, and yet, people do it):
What's interesting here is that you could argue that if you bought the traffic from party 'A' and sold it to party 'B' you should be free to do so. The only reason Google can (and does) put a stop to this is because they see both sides of the trades and your take is technically their loss.
But people buying traffic on adsense or another source of traffic that is cheaper than the one where they are selling it could likely pull this sort of thing for years.
There are very few cases of advertising arbitrage that still work today. I certainly wouldn't tell anyone about it if I found an arbitrage opportunity in the market.
However, sites like info.com advertising or shopping comparison sites are the most classic examples.
While arbitrage is forbidden, placing AdWords ads on the pages that have value and purpose other than serving ads and simultaneously buying AdWords traffic is legitimate.
Jacques is correct here, if the ads on the landing page are substantially similar to the ad word buy then Google will penalize you. So if you buy and Ad for 'hair dryer' and you have a page which says "a hair dryer drys your hair." and a bunch more AdSense ads around it for buying a hair dryer from different vendors, that will eventually get you in trouble.
It is however "ok" to buy an adword to a page about, say a '65 mustang restoration article you did. Have it be mostly an article about restoring a mustang and a "few" (for some opaque definition of a few) AdSense ads on the page which may or may not be related to the AdWords buy.
But what is really the bottom line is that the variations are endless :-)
Then you're asking for trouble. Some google flunkey will have to determine what 'value' is, come down on the wrong side of your imaginary line and boom gone is your adsense account.
It's a risk some are willing to take but I would be very careful with that strategy, especially if the pages are used in this combination right from day 1.
It's against the TOS of almost any ad serving company but that doesn't mean it does not happen. (which is interesting, because you'd think it would be very easy to detect, and yet, people do it):
https://support.google.com/adwordspolicy/answer/190442?hl=en
What's interesting here is that you could argue that if you bought the traffic from party 'A' and sold it to party 'B' you should be free to do so. The only reason Google can (and does) put a stop to this is because they see both sides of the trades and your take is technically their loss.
But people buying traffic on adsense or another source of traffic that is cheaper than the one where they are selling it could likely pull this sort of thing for years.