Increasing eCPM without decreasing CTR is very hard to do because anytime you're trying to increase your eCPM, you usually end up decreasing your CTR. In Google, Smaller ads payout "higher" because the top AdWords bidder gets that position. Example: If you have a 125x125 and someone clicks that ad, then you're getting the most money possible for that ad because the top bidder will always be the one who's ad is displayed. The reason why I put "higher" in quotations is because the ad doesn't really payout "higher." Instead, the 125x125 advertisement will always have the top bidder, thus making you the most money when that ad is clicked. However, in other "larger ads" such as 336x280 and 300x250 there's a 1:2, 2:3, or a 3:4 chance that your 'ad clicker' doesn't click the top ad. Let's say he instead clicks the 4th link down in the ad. You make less money than if he would have clicked the top link. The prices obviously differ for each niche. However, from personal experience, top links payout 40 cents more per click then bottom links. AdWords can be compared to a tree. The first ad (not unit) but the first actual ad link that someone can click on will payout the most. The second ad unit a little less. The third pays a little less. The 4th pays the worse. What you should try to accomplish to earn WAY MORE Say you get 30 clicks a day on a 336x280 ad. However, nobody seems to be clicking the top link leaving you at earnings around $3.00 dollars for that day. (Which is only 10 cents a click.) If you can figure out a way to get the same amount of visitors to click your 125x125 ad which pays about .50 cents a click the same amount of times they were clicking your 336x280 ad, you'll make a lot more money. This is obviously a difficult task because the smaller ads don't get clicked on as much. Think about this though. 30 clicks makes you 3 dollars on the huge ad unit. If you could just get 6 clicks on the small 125x125 ad unit you'd be earning approximately the same amount you were on the huge ad unit. I'm experimenting with the whole ordeal. So far, it seems that placing the smallest horizontal above the header of your site doesn't have too bad of a CTR. It's like "the oddball out" ad. I'll continue to experiment and you should too!
That's a good point your making and I have been experimenting with that for a while now. For example, I found if I place a link unit near the top of the page, it gets a lot of clicks but very low value per click. So I figured that's a good area in terms of CTR, so I replaced with it with a small ad unit. Clicks dropped but the average earnings stayed the same.
Great post, and a very good way of looking at this issue. I find people tend to click the lowest payng ads because of their spamy titles as well.