Several months back our small network of subject-specific blogs earned a grand in a month; now we're almost halfway to being in what used to be the "UPS Club".
You know the formula - find a topic with a high CPC, build a site around it, do some link building, then create tons and tons of content cheaply. The long tail combined with your topic's high EPC means you can get a high return w/out much "SEO risk" (i.e., it doesn't matter if we don't rank for our main keyword, as long as we rank for thousands of 2, 3 and 4 word variations).
So what's on the horizon for us white hat (or, ever so slightly gray) content spammers who make a living off of Adsense?
1) Yahoo! Publisher Network
What's kept me up nights is the thought of the dreaded email, "your Adsense account has been canceled because we've detected unusual activity". The existence of a competing, similar network that I could go to hugely lowers my risk.
Better services & payout
Competition should lead to new features and *possibly* higher payouts (though the Adsense payoff, at ~70%, is already high). Yahoo is pretty much our only hope to rival Google in the short term; other, smaller networks like Kanoodle don't have the critical mass of advertisers to deliver a steady stream of relevant ads, and they don't have a large, quality mass of publishers to attract these advertisers.
1) Will my CTR eventually kill me?
We put large rectanges and skyscrapers on every page, which looks slightly obnoxious. This triples our CTR rate compared to "better looking" placements. But what percentage of people are clicking on these by accident since they are so prominently placed? Shouldn't smart pricing be discounting these clicks?
2) Will Advertiser Choice kill the little man?
The beauty of Adsense is that it doesn't matter who you are or what you reputation is-- you're basically paid based on your topic (CPC for those keywords), and the quality of your traffic (well, sort of, with Smart Pricing).
Now with these new CPM ads, the advertiser has power to target specific URLs. In the future it is likely Google will give advertisers even more power to do this. It seems the the system is beginning to favor large, prominent sites, since these are those most likely to be specifically selected by advertisers.
Think about it-- some advertisers have turned off contextual advertising because of low quality traffic and referrals from scraper sites. If they turn it back on because of URL targetting, they're likely to only pick 3 or 4 "best of breed" 800 pound gorillas in your sector.
The result is that your site that gets 10 or 50 clicks a day may just not be worth the trouble to research and URL-target (in the advertiser's eyes).
3) Google's War on SEO
I know some people don't like the word sandbox, but the truth is, Google has gotten quite aggressive in discounting what it *thinks* is link spam. This does neutralize some spammier new sites, but it also seems to nuke some new legitimate sites (they take out the "baby" with the "bathwater").
I'm sitting pretty with my one-year-old domains, but I'm loathe to invest time and money in new domains, that's for sure.
4) Click fraud
Google's network has certainly grown by leaps and bounds, and I can't complain that there's a lack of quality advertisers. But this issue really undermines the entire model in the long term.
Looking above I see one *very* positive sign, but 4 negative signs. What do yah'll think? Should I start building an ecommerce site and prepare for the worst (d'oh! Then i would need "inventory")? Should I invest in building more and more content sites to reap rewards as contextual advertising explodes? Or will it implode?
What does the future look like to you?