Yea, we too have clearly the leading product in our niche. I say "leading" because more people buy our product than those that outrank them. More websites have our product installed. We have 10 times more links pointing to our site. We have the largest community compared with competing products. There are more "widgets" for our product than the others, etc. etc.
But google did some kind of strange penalty. We still rank for our brand name, but not for the product type. It's been a year.
We have been able to match the sales we had before the penalty with email campaigns (more of them), and continuing to offer more to our customers. The last couple of months have been among our best.
We have been focusing more on Facebook and Bing, and hoping that they will continue to increase their market share. Just as google seems to be supporting what gives them money over serving the best search results, we must also focus our efforts on those sites and marketing strategies that serve us best.
Oh, and I completely ended Google Adwords, and we are actually selling more now (through altering our marketing allocation elsewhere). Next steps will likely include using more and more products from other providers. For example:
1. Switch to Bing webmaster tools and analytics
2. integrate Facebook widgets more and more (already well under way)
3. Increase advertising on facebook and bing
4. Replace adsense with things like Viglink and Amazon (already under way)
If at some juncture google can prove they are wanting to provide traffic, maybe we will give them some consideration, but it is obvious my views are shared among many. It's not some isolated penalty. Instead it is a move to provide traffic to large corporations, and google is a corporation run by stockholders now.