Google is getting stricter and stricter and prohibits buying links.
If you do link 2 sites together, make sure they're hosted on separate servers, Google will still think it's spam.
No matter what you pay, you know next day your competitor would come in the next day and bid one cent higher. For that reason, I don't think I could ever have enough to give.
Yes, Adwords has done up. I had a campaign over a year ago and it just sat there PAUSED with 500 keywords. Clicks were about $0.15 a year ago. Well, a couple of days ago I visit again to reactivate and 370 of the 500 keywords don't meet the minimum bid. Bids for those same keywords have gone up...
I find that Google has been quite reasonable. I work very hard for my site and I don't particularly appreciate a liberal approach that allows my competitors to slack off and surpass me by cheating.
My site has dropped from a 3 to a 0. Considering that I've added quite some quality content and gotten new, legit & quality links to it, it's a bit sad to see it has dropped. I'm still trying to figure out why it dropped, but my page views are up 5x and I get dozens more SERPs clicked daily, so...
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