Prepare data for analysis

After a period of time using adsense products, you have enough data to start learning from experience.
Adsense offers some good reporting tools to help you manage your ads and adapt your advertising strategy to the unique reality of your website.

To summerise my approach I would say that it is all about "identifying what works and what doesn't to take appropriate actions" .

Setting up a framework for analysis

By default, your adsense account will only give basic data about how well your ads are performing. In fact, the data is only grouped by product type and no difference is made between ad units and link units.
This is really not enough if you are serious about developping your adsense business.

Using channels

To figure out what channels to use, you need to ask yourself what data you would like to have. Would you like to know what ad format has the best performance? Would it be better to have an idea about the performance of each section of your site? Are you concerned about where to put your ads (top of the page, bottom, left...)?
According to your answers you need to use different types of channels.

- URL related data:

If you have more than one domain (or website) that displays your ads, I highly recommend that you add all of your domains as URL channels to track each one's global performance individually.
For an indepth analysis of a particular domain, use URL channels to track directories or even pages if these are not too numerous. This will provide an idea about how well every section or page of the website is doing.

- Ad format related data:

Some ad formats are known to be more profitable than others. To make sure this is true for your website too, I recommand that you define a custom channel for each format that you use. For example, use "300-250" for small rectangles or simply name the channel "Small rectangle"... Make Money with AdSense

- Positionning related data:

Where you place ads on a page is sometimes crutial to their performance level. To track this influence (if there is any) use words like "left", "top", "middle", "text embeded", "in menu"... to define custom channels.

- Colours related data:

Colors can also be intersting to track as they can impact the CTR of an ad unit for example. The best choice here is to define custom channels based on the palette you use ("open air", "ink"...).

Of course, these are just suggestions and you are free to come up with other criteria you find relevant to track.