tedster - 12:30 am on Mar 29, 2012 (gmt 0)

We do buy ads though, which some have direct links, but the purpose is for advertising, not for SEO.

If those links do not include a nofollow attribute, then they might be part of the problem. In the past, I know that Google just ignored commonly used advertising links when the source site did not include the nofollow attribute, but that was in the past. Maybe things are changing (but maybe not... it's hard to tell.)

but rather what was mentioned about how many blogs were devalued

It was blog NETWORKS that were devalued. And if you saw what was in those networks, I'd say there was no gray area at all. It was a clear manipulation, using automatically generated text, badly spun articles that didn't make sense... all kinds of spammy techniques.

If you used the services of a blog network, you would know it.