"If there is only one ad AND it is low paying - don't you end up with PSAs after blocking it?" Although only one ad was showing, there are other ads available. This morning, 3 ads are showing, normal for the 250x250. The EPC is approximately 10 times as much. Sometimes AdSense gets "stuck" using a single, low-paying ad. Using the ad filter can fix this, and did in this case. Why do they do it? Who knows. I sure don't. Sometimes they seem to concentrate on a high CTR ad, in spite of the fact that the ad pays very poorly compared to others. Even though a CTR may be 3 times greater, the EPC is only 1/10. So, less money for both Google and you. There seem to be other factors at play here. An ad can get a "preferred" status for other reasons than CPC and CTR, I think.
That's an really interesting thing. Even from the AdWords customer's point of view (which I am also, but in a totally different function). I always thought they'd use a combination of CTR and bid value. Well, maybe even Google sometimes gets it wrong Thanks for posting that info.
that's exactly what they do, but the ctr for the keywords is projected, based on data that may not be relevant to your site traffic. you can tell how screwed up those keyword projections are by looking at how many off-target ads you get, or how many of 'em have the wrong geo-targeting.