It is a good idea to change all your 300x250px Google Adsense ad units to 336x280px large rectangle because an amazing feature change happened recently. You might be aware that Adsense started serving smaller image advertisements in larger ad units when the smaller image ad unit was higher paying or simply when larger image ad inventory was not available to compete (especially true for 300×600 large skyscrapper and 970×90 super leaderboard ads).
Now Adsense team has implemented a similar strategy for the medium rectangle (300x250px) and large rectangle (336x280px) ads as well.
Larger Adsense Ads Are Best
This means that if you display a large 336x280px ad, the 300×250 image ads will also complete for the the larger ad space! Therefore, 300×250 image ads may display in place of the 336×280 image ads if they win the ad auction.
This also means that if this smaller image ad gets clicked, it will earn more, as it competed better against the larger image ad. Which means that if you switch to the large 336×280 ad unit, all the image ads of 300x250px will also compete and you will make more money by higher cost per click. However, the CTR may vary as more image ads may display and ad targeting will determine the clicks.
This will not happen vice versa – of course the larger image ads cannot compete for the smaller space. If you use a medium rectangle ad of 300x250px, then it will not be competed by the larger image ads. Since there is no inventory shortage for both the ad unit sizes, there should be many more 300×250 ads to display as it is a more popular image ad size.
Design wise, while the 160px wide skyscraper in the 300px wide large skyscraper looked awkward and incompletely filled a tight website design, the 300px medium rectangle AdSense ad fills in well in a 336px wide ad leaving little empty space. If you have extra white space around ads, no one would even notice the smaller ad change!
Now many people use the rectangle ads commonly as it blends easily with content and gets higher CTR. We have observed that medium rectangle is more popular among advertisers for image ads, while the larger rectangle ad shows more text ads, which look better placed because of the larger ad size.
We have replaced all our ads on single posts with the larger rectangle AdSense advertisements and now get the best display for text ads as well as image ads. 300px ads also display many times, and suit well in our design. You can also try this on your site and notice the increase in cost per click!