“Location, location, location.” It is true in real estate and true in advertising, including web advertising. Since the “location” of the user is your site already, the “location” of the ad in this context means on which pages, where on the pages, and so on. As noted, the less an ad looks like an ad, the more effective it is likely to be.
Then there are general design and usability factors to consider.
If your webpage is cluttered and you can’t dispense with any content, you may want to break it down further into sections or more pages to provide easier reading. This also gives you the potential benefit of placing additional ads.
As noted, we generally recommend text-based ads. However, text-dense sites may actually do better with image ads. If your site has very few graphics, you may want to balance it out by putting image-based ads. In the monotony of a lot of dense written information, image-based ads and graphics provide what’s called visual relief. This can also prompt clicks.
Where should you put the ads? The chances of your ad getting noticed by the visitors to your site increases greatly if you place ads as close to the top of your webpage as possible.
If you choose to place so-called ‘skyscraper’ ads – in magazines these would be called columns – on the sidebars of your webpage, it would be wise to place them on the right side of your principal content areas. The reason for this is the visitor to your page (in most languages) will read from left to right, he or she will chance upon the ad ultimately, if not consciously then at least out of habit. Their eyes will go there. From the left, they can visually “skip” the ad when they start reading next to it.
Your ads should be placed in such a way that it matches the links to other websites on your site. If you already have a links section on your site, put the AdSense links in that section or list. This is not dishonest – if it were Google would not allow it.
Obviously if you have a “most popular” area on your website, such as a page that is updated daily with some kind of material that people bookmark to revisit often, place your ad(s) there instead of somewhere else that may get less traffic. For many websites the home page is not actually the most accessed area. If you don’t know what the traffic pattern is on your sites, it’s easy to find out – ask your hosting provider about usage logs.
One more thing: While some affiliate marketing programs encourage host sites to encourage clicks directly, it is not appropriate to expressly ask your readers to click on the ads served by the Google programs. Not only is it unprofessional and arguably unethical, it also annoys people and moreover Google AdSense actually prohibits any such activity. You can neither directly solicit clicks nor can you do anything considered deceptive to encourage clicks.
In conclusion, the emphasis is always on quality of content on your web pages.
Good and interesting content makes your site better, more acceptable to Google, more likely to win with AdSense, and therefore more profitable for you!