netmeg - 3:45 pm on Mar 1, 2012 (gmt 0)
Changes in the algo could increase the number of advertisers because not everyone can afford to wait around to see if their SEO tinkering will bring the traffic back. In the short term, they may turn to AdWords.
In fact, I'm reasonably sure that some of my clients competitors have done this for that very reason. I keep pretty close track of competitors and other industry websites (I am responsible for organic AND paid traffic for my clients), and it's pretty easy to see when one of them gets dinged by a Panda or a penalty.
And I do see some crazy minimum projected first page bids by Google, even on QS10 keywords. I don't usually end up *paying* that amount, but it's what they report.
So I think there's kind of an indirect relationship going on here.
That said, I've never actually tried to hook up increased competition to an algo change date. Maybe next time I will.