From The Wall Street Journal: The AdSense team offers an official heatmap to help publishers decide where ads should be placed on a page. The orange regions above the fold get the maximum attention of visitors, while the beige and white regions in the graphic are mostly ignored. Another video from Google – Bigger is better – recommends that publishers use larger ad units for better performance. In other words, bigger ads placed above the fold have been the “winning combination†for AdSense publishers all these years. But not any more. The Google Search team recently rolled out a new Page Layout update to search algorithms that is likely to affect the search rankings of sites that have a low content-to-ad ratio above the fold. According to Google engineer Matt Cutts, “[if a website] doesn’t have a lot of visible content above-the-fold or dedicates a large fraction of the site’s initial screen real estate to ads, that’s not a very good user experience. Such sites may not rank as highly going forward.†With the recent algorithm update, ad placements that were originally recommended in the heatmap can suddenly bring your site into Google’s own crosshairs and you run the strong risk of a demotion in search results if your ratio of content to ads is not improved.The change may affect the bottom-line of small publishers in the short-term, but it’s likely to improve the overall online experience of the average user. How often do we land on pages that are cluttered with ads while the actual content is tucked somewhere down below. Now that ad placement in the above-the-fold region is a factor in search rankings, such cluttered sites may find it hard to make it to the first page of Google. ....read full article here
Basically it says that if you have more ads than content on your page, then your rankings go down. Also, the placement of the ads should be such that they shouldn't turn off the visitor...for example some sites have to many ads on top even before an article/content begins