A similar thing has happened to me. With all the Penguin/Panda updates a lot has been affected lately.

Well smart pricing may be giving you lower EPCs, and I for one am convinced that the key to smart pricing may be traffic quality. So I guess I'd look at that first - is it essentially the same traffic this year as last? coming from the same mix of sources, and from the same general locations, on the same keywords (insofar as you can tell)?

Based on my 7 yrs Adsense experience, ctr is not that important. I focus more in page views. I have the lowest ctr averaging only .30% but I earn quite well because of my very high daily page views. If your traffic has decreased then yes, your earnings will suffer as well. Focus more on your traffic not on number of clicks on your ads.

Thanks you all!

Would changing to text only help in any way?

Focusing on traffic yes, great. But how do I get more traffic (I guess if I could do that, I'd be earning more already...)

If youre new to Adsense, I would not even focus on how to earn more money. Your number one goal is how to increase your traffic. The secret is creating a website with a topic you're passionate about. Let's say you're good with English grammar, you can talk about how to use proper tense, correct spelling, etc. You can create thousand of pages about that subject. So When someone do a search about ""when to use loose vs lose", google may rank you highly because you have a lot of articles about the subject. 

Other tips are:
1. Pleasing Professionally designed site. 
2. Fast site load 
3. Easy to understand navigation
4. Create at least 5 articles a day
5. Good grammar. Correct spelling. (I have someone who corrects my English)
6. Never share your site to family members or friends (to prevent click fraud or click bombing)
7. Follow Adsense policy. No cheating.

Your traffic goal:
Year 1: at least 5,000 page views per day. If you're not able to reach that, then change the subject or add another subject. Or invest in advertising.

Year 2: at least 30,000 page views per day.

Year 3: 50,000 page views per day

Year 5: 100,000 page views per day.

If you want to live comfortably, aim for 200,000 page views per day. Impossible you say? I don't think so. If you're passionate about the subject, you can create many articles about it. My advice is to find a subject that is easy to update and has vast topic to talk about so you'll never run out of articles or ideas.

Good luck!

When you mean articles are you talking about writing something to post outside my site?

Why don't I write 5 pages a day on my own site? Why would I do so?

Generating even 2 nice pages a day is more than I can do without paying someone, and believe me I can't pay anyone as I'm now.

5 articles or 5 pages per day. You can have 2 nice pages but inside those pages you can have 5 galleries for each.

Example:
Article 1 about Gardening: How to care for roses. Inside that article, you can have 5 photos of different roses or step-by-step instruction with photo illustration. So in total, you already have 6 pages for one article. That equals to 6 page views. If you have 100 visitors in one day and they view all those 6 pages, you already have 600 page views in one day. And if you have another article with similar number of pages/gallery then that's 12 pages, which is 1,200 page views.

It is important that you monetize all those pages/gallery. You can put adsense above/below the image gallery.

I don't recommend just creating two pages per day. That's why i always advice anyone to find a topic that is easy to update, unique, and has vast information to write about.

About text amount. How many words per page is recommended?

At least 3 words would suffice. Per my example about how to care for roses. On the the first page, you can have one paragraph of 50 words. Then on the image gallery, you can only have 3 words that describes the rose: Red Rose Perrennial. Or you can extend it further: Red Rose Perrenial Direct Sunlight Water Every Day.

I recommend not to spend more than 15 minutes in one article. I can do mine in 5 minutes max and I create about 300 pages per day working for 8 hours.

My other advice I can give you is to create a well designed site, professionally looking like CNN or other big sites. I have a little advantage because I'm a graphic artist but my weakness is my poor English. But I know a site that corrects my grammar quickly and for free. If you use Wordpress, there are a number of template design you can use. Make sure it's from a refutable company to prevent spamware or virus. Once you test the template and like it, you can buy it for $20-30. Then befriend a programmer or research programming, to personalize your template.

Example:
Article 1 about Gardening: How to care for roses. Inside that article, you can have 5 photos of different roses or step-by-step instruction with photo illustration. So in total, you already have 6 pages for one article. That equals to 6 page views. If you have 100 visitors in one day and they view all those 6 pages, you already have 600 page views in one day. And if you have another article with similar number of pages/gallery then that's 12 pages, which is 1,200 page views.

writing stuff like this isnt going to help him make money, though. it might bring in the traffic, but what kind of people are going to be reading it? they want info about roses, so you give them it, and they go away again. anyone who searches for "how to care for roses" in google obviously already owns the roses. so what are they going to buy? nothing.

why would an advertiser want his adverts on a page like that? what does he get out of it? the advertiser is looking for people who want to buy something. the kind of people who read an article like that are not really looking to buy anything.

even if they do click an ad, they probably won't do anything worthwhile at the other end. so all you are really doing is reducing your value to the advertisers. over time your eCPM will drop.

its not all about traffic (although that is probably the most important thing, admittedly). the aim of the game is to try and pre-sell whatever it is that the advertiser is promoting.

It really depends on your site. The Rose is just an example. You can talk about fashion, golf, photography, etc, with few little words. Your aim is to get your visitors hooked and keep coming back to your site. Thus per my advice: a well designed site, daily site update, and great content.

It really doesnt matter how many words you write, it all depends on the quality of your content.

Well and the authority and the uniqueness. Because let's face it, there are eleventy billion webpages about roses out there, and even if yours is written to the point of being eligible for a Nobel Prize for Literature, it's still essentially giving the exact same information that everyone else has. And a poorly written page from an authority will probably trump a better written page from a newcomer or little guy, if the essential information is the same.

Be different or be damned.

And a poorly written page from an authority will probably trump a better written page from a newcomer or little guy

Netmeg my personal favourite from over twelve years ago was where a retired college professor of my acquaintance simply dumped his life's lectures on to a web site.

Each page was in the following sequence:

Lecture 1.txt
Lecture 2.txt
Lecture 3.txt
...
Lecture 101.txt

No matter what, he wouldn't let me "Dolly" it up to basic .htm pages with title/description/keywords and meaningful page names.

A shame, it was brilliant material.