I am yet to be convinced. By the reverse, a high CTR site doesn't necessarily mean that it will convert well for the advertiser, either. If all you have is an ad and a few lines of content, your CTR might be pretty high, mainly because your visitors just want to get off your site and by the law of averages, 50% will hit the back button, 50% will click an ad. Nothing of what you said addresses how things convert for the ADVERTISER which has a bigger effect on the smart pricing if I understand it correctly. Unless you are saying that the heavy traffic site converts poorly, in which case you've defined it thusly. How do you KNOW if a site of yours is sending quality visitors or not?
I only stumbled on this thread today and needless to say that I found it extremely informative. This is what I've found over the years when using Adsense. Google controls Adsense considerably, this is very evident on my sites. If I earn $5 from 100 clicks, the chances are that with 200 clicks my earnings will only reach $7 to $8. I've noticed also that my earnings are always the same no matter how many clicks I have. For example, over the past days the number of clicks increased considerably but after Christmas they feel again. On my sites the earnings generated with 200 clicks are nearly the same as that of 250 clicks. It is evident that Adsense increases or decreases the value of ads to maintain earnings stable.
I was wondering if this is channel-based. What if I put all my low CTR crappy sites on one channel, will that reduce the effect?
No idea if this is still active tbh. I have low CTR, but high paying clicks. This has been stable for over a year now and I have added and took off many crappy CTR/PPC sites from my account so far. I think there are other forces at hand.