You can choose to display either text ads or image / rich media ads for Google AdSense, or you could also choose to let Google display both types (which is the default, recommended option). Google will display whichever ads with the highest bid regardless of whether you choose to display both types.

The default Google AdSense setting is to display both. Some people claim that text ads perform best, while some have more success with image ads. Google's advice, however, is to display both.

So, which type of AdSense ad unit should you use for your site?

As with other Google AdSense optimization tips, it all depends on the type of site you're running. Also, note that choosing the right ad type could complement your site's design. The following lists the pro and cons of each ad unit's type.

1) Text

Many AdSense publishers report that text ads perform best on their websites. This is probably because more ads are displayed in one ad unit than only one ad when using image ads. The CTR and CPC are normally higher than image ads. Text ads perform well if your site has many images or if the ad unit itself is placed next to an image.

2) Image / Rich media

Image ads are catchy and can easily attract your site visitor's attention, especially if your site is mostly text. More image ads are eCPM-based compared to text ads, which means you'll get your earning based on page views, not on clicks. This is good if you have sites that have low CTR.

Images ads perform best compared to text ads used in leaderboard unit (728×90) as a banner ad.

Image ads normally pay less per click, but with high CTR in some cases, you can earn more with it.

3) Both

In most other situations, the best idea is to display both types of ad units. AdSense displays the highest paying ads in an ad unit, so image ads will only be displayed if the CPC is higher than all the text ads in one ad unit combined. This ensures you earn more with each ad clicked.

Since every site is different, it's best to perform A/B testing by using each type of ad for a specific time period and then comparing the earnings of each period.

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