I give a variety of tips in the 3 question interview but here’s the crux of it for me with 3 main factors to consider:
1. Positioning – in general ads close to your content work best. Ads above the fold usually work best. Other key spots are anywhere that your reader naturally ’stops’ reading (ie at the end of an article).
2. Relevancy – you can have the prettiest and most well positioned ads in the world but if they are not relevant to your reader (and the content you’re writing about) then you’re unlikely to have them click it. This is why ‘contextual’ advertising works so well – it see’s you’ve just written about iPods and puts an ad up for iPods. If you’re using an ad network that isn’t contextual you’ll need to find ways to manually choose relevant ads.
3. Traffic – it’s obvious, but once your ads are well optimized you can have the most impact upon how much it earns by getting more traffic to it. However not all traffic is equal in terms of conversion. I’ve found that traffic from search engines can be quite good at getting clicks on ads like ‘AdSense’ ads while traffic from another blog with a good recommendation from the blogger can do better with affiliate programs. Traffic from regular readers is harder to convert with CPC ads so again affiliate programs can be better.