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Google allows up to three AdSense ad units (plus one adlink and one Google search box) on a website at any one time. In most cases, it is best to run the maximum three - the more ads you show, the higher the chance it will catch a reader’s eye. However, there are times when having less ads could make you more money. This is caused by something known as the Google Bid Gap.

What Is The Bid Gap

The bid gap is the difference in price between the Google ads. The top spot always cost the most, with each lower position costing less and less. The gaps between the top four bids are normally very close. However, once you get pass that, the gap can widen substantially. For example, the bids on a high paying keyword might be $5.00, $4.99, $4.98 and $4.97 for the top 4 spots, and then 10 cents for the fifth spot. There is only a 1-cent gap between positions 1-4 but a $4.87 gap between positions 4-5.

If you were running the maximum number of Google ads to target the above, you would have one ad block with the high paying bids and two ad blocks with much lower bids. Chances are, a reader would click one of the lower paying ads because there’s more of them. In this kind of situation, it would be to your advantage to reduce the number of Google ads to get rid of the high bid gap.

Adwords advertisers know that most Google ad sizes display a maximum number of four ads. Since they know some sites only run one Google ad, competition for the first four spots of the first banner can be quite high. Bids on the second set of four could be substantially lower and the third ad is normally where the MFA (Made for AdSense) sites play in.

When Less Could Be More

Reducing the number of AdSense ads on a page will give you more per click. However, it will reduce the total number of clicks you will get because of fewer ads. You will have to monitor ad performance to make sure the total revenue continues to go up. Generally, when there is a high bid gaps between one set of ads to another, it is best to reduce the number of ads.

There is no way to figure what the bid gaps are in your Google Ads. For evil reasons, Google does not release this information. The best way to monitor the situation is to set up custom channels for each ad units and monitor their performance. If one ad unit’s eCPM is significantly lower than another unit with a similar click rate, then it’s an indication of a huge bid gap. Remove that ad and see if the extra clicks to the remaining ads makes up for the lost of revenue. If the gap is great enough, it should do that and more. You can also try using the competitive ad filter to kill off the MFA sites.

It’s All About Tweaking

I have said this many times but it bears repeating. Google AdSense is all about tweaking. Google would like you to believe it’s a set it and forget it type of deal but it’s not. In order to extract maximum AdSense dollars, you have to tweak everything and monitor factors like the bid gap.

[Via John Chow]

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