If I had to narrow my advice on using AdSense down to a single word it would be 'experiment'. Let me explain.
That day back in October of 2003 I had no idea on what I was doing. The next day when I logged in to see how much I'd earned it was barely enough to buy me a coffee.
However, on that day I decided that those few dollars in earnings showed potential and I determined within myself to learn how best to use AdSense to grow that income. Almost everything I've learned since that day has been through trial and error.
It has been a long process of testing and tracking results. You see, while there are a few good home truths that seem to work on most sites, every website that I've used AdSense on is different. Some things work well on some sites, but it is rare to find something that will work on every site. As a result I tend to experiment with my use of AdSense in these six ways:
1. Ad Position - Most AdSense publishers have seen the neat little heat map that AdSense has produced to show where ads work best on websites. In general it works fairly well and is a great place to start, but make sure you experiment with new positions for ads and see what works best for your site.
Hint: Ads near (or even surrounded by) content have worked the best. I've also found ads at the end of content perform well. People get to the end of reading your article and then are looking for something to do or click -- an ad positioned there can work well.
2. Numbers of Ads - More ads earn more than less ads... don't they? Unfortunately it isn't always the case.
Test different combinations and numbers of ad units on your site. There's usually a 'tipping point' where you hit a ceiling of how many ads your users will accept -- push it too far and you could hurt reader engagement, traffic, and in the long run your earnings. On the flip side of this, don't be afraid to have more than one or two ads on a page, particularly if you have long pages with lots of content.
3. Ad Design - I can still see the first ads that I first used on my blog back in 2003. I can still see them because they fried their imprints into my retina -- they were so LOUD!
I figured that the ads would do best if people noticed them so I went for the most crazy color scheme I could come up with. Over the years I began to experiment with different combinations of ads and found that more subtle or blended ads tended to work best for me. Having said that, you can sometimes blend too much, to the point that the ads become invisible to your reader. So test different colors and designs of ads to see which work best. Use the ad rotating tool that AdSense offer publishers to rotate different designs to work against ad blindness among regular readers.
4. Ad Sizes - AdSense offers us a range of different ad sizes, so experiment with them all to see which works best. Hint: Some might think that the bigger the ad the better it performs. This is not always true.
For example, I found that the 'large rectangle' ad (336 x 280) didn't work as well for me as the smaller 'medium rectangle' ad (300 x 250). It turns out that more advertisers (at least those in my niche) prefer the medium rectangle ad as it's a more standard ad unit size than the larger one. Again, the key is to experiment and see what works best for your site and niche.
5. Ad Formats - I've found that choosing image and text ads works better than just choosing text ads, but that's not the only choice we get as AdSense publishers.
AdSense also allow us to run link units, AdSense for search, etc. I've found that each of these different formats will work differently from site to site. I've had blogs where the link unit ads were the best performing units on the site while on other sites it didn't really perform at all. You'll never know unless you test it!
6. Which Content Converts? - One of the best advances that AdSense has made in the last year has been the integration between it and Google Analytics. To be honest I'm still digging into the metrics that this opens up, but the insight that this gives has amazing potential to increase earnings.
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