Most of the publishers who have been using Google AdSense for a long time must be familiar that they can place up to 3 ad units, 3 link units and a search box on a web page at a time. It is always better to have three AdSense units on your website, because the more ads you display there are that much more chances of catching the reader’s attention towards these ads. However, depending on the niche that you choose for your blog it may be the case that you may have to display more or less depending on the market competition. In some cases, displaying only one block of ads can help make you more money than by displaying more. This may be due to a bid gap between the advertisers.
Google Bid Gap Explained in Detail.
Bid gap is difference of amount an advertiser pays in order to get the top spot on a website. It depends on the spot where his advertisement displays on a particular website. The closer the advertisement is to the top of the page, the higher is the amount an advertiser has to pay to place his ad at that spot. In addition, the first 3 spots on your website would cost an advertiser dearly with subsequent ones being very cheap. e.g For a particular keyword an advertisers may pay $10,$9.75,$9.6 and the subsequent spots costing $2,$1.5 and so on.
So if you are having 3 blocks of ad on your site. You might have a block of ads with very high bids and other two with fairly lows bids. Chances are very high about 66% that user will click on the block with lower bids. Therefore, it is advantageous to keep the ad blocks to a minimum in this case for it to work to your advantage and get maximum out of the AdSense program.
AdWords advertisers are aware that maximum number of ads displayed in an AdSense block is up to four. Many sites run only one block of Google ads, hence the bidding for the top four spots can be quite fierce and high. The bidding amount drastically reduces from the fifth spot onward and then difference between fourth spot and fifth spot could be as much as $10.
Why less could mean more for you.
If you reduce the number of Google ads on your page, the price per click on your site will definitely shoot up. However, the downside of it is that you would fewer clicks on your site because of reduced number of ads. A careful monitoring is required in this case to guarantee that your total revenue goes up. Generally, when you have designed your site with high paying keywords it is best to run minimum number of ads so that you earn more per click.
Google does not let you know the bid gaps for advertising on your site. The only way to find it out is to set up different channels and monitor the performance of each channel. If there is huge difference in e-CPM between the channels for approximately same number of clicks, you will have to remove the less paying block and check whether more clicks to the remaining blocks make up for the removed block. Ideally it should, in fact it would increase it even more. Thus, you can make more money by displaying fewer advertisements on your website.