You can increase your earnings by increasing your traffic. Traffic is all you need to earn money. And the traffic needs to be targeted.
www.DuoBlogger.com is having a great series for beginners going on right now, you might want to check out their blog. Note: I'm in no way associated with DuoBlogger but I do read it .
Traffic - How much traffic does your site receive? While many factors influence earnings, traffic is the most significant. In general, earning potential is greater for higher traffic sites than lower traffic sites. Cost Per Click (CPC) - How much will you earn per click? This question is difficult to answer because it varies so widely. The CPC for any ad is determined by the advertiser. Clickthrough Rate (CTR) - The other factor that influences earnings is clickthrough rate (CTR). CTR is a measure of how often users click on your ads. Effective CPM (eCPM) - while CPC and CTR are important factors in determining how much you may earn, you may find eCPM to be a more helpful statistic to keep track of your earnings. Content - Last but not least, the quality of your content is also an important factor in determining your expected earnings. If your site provides rich, compelling content and a good user experience, then your site will receive more interested users.
Hbl - You could of just put the link to where you got that actual information and maybe arthro or another person seeking the answer could read more into it or pick up a little extra themselves https://www.google.com/adsense/support/bin/answer.py?hl=en&answer=81567 Credit where credit is due
From my experience, you need to have apply proper colors in your ads, these colors must blend in your site, yet attractive enough. Try to experiment on your ad placement and look what is the most effective in your site. Also try to experiment between image ads and text ads.
Here's a secret to increase earnings: Make an ugly website. So ugly that people will want to click the ads and leave. Put your content below the fold. Try it, it works. Puke green and orange colors help. I get a lot of comments asking me why random zoo is so ugly but that's nothing compared to some other sites. (I'm not saying bad content - just ugly websites) If ugly isn't your thing you might also want to do the grizzly-style blogger template styles. Lots of spacing at the top, pad it with ads, content below the fold. I can't remember his site, but you can check out an game selling example a friend is copying. Don't think he stuck the adsense in yet.
It seems that you've been reading Grizzly's blog, and I agree with you. Ugly blogs are more attractive to ad clicks than with those using attractive templates or themes. But of course, a blog should be on top of Google search. It is also better if it is only for one keywords but a lot of them.