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Ads placed above the fold are by far the best earners
As for where Google draws the line, can't say but I start by asking myself if my above the fold layout is obnoxious to me because I'm highly sensitive to pages where I have to dig through a barrage of ads to find actual information. I hate having to design pages to accommodate ads because generally, I hate advertising (while accepting it as a necessary evil in my quest to earn a living). So, I may be more sensitive than Google where this subject is concerned. Perhaps that's a good quality to have, who knows?I couldn't agree more, websites that stuffed with ads just before the content do my head in. I think you've got to look at it two ways, you must have your ads placed where they are going to generate the most clicks. On the other hand, annoying your users will not do you any favours whatsoever. I used to put a 300 rectangle above the contents and just below the heading. However, it is ugly and there's no effective way to make it look pretty so I have limited these ad units to articles that are fairly short and cannot really hold my skyscraper, plus a side menu. But, these units are good earners so I would never say not to use them.