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However I have thought that once viewers see the ads some companies will (we expect) contact us for advertising.
Now the way I understand Adsense, is that I can stop and restart at any time. Does this mean for example if an advertiser comes to us and wants to pay X to advertise that I can simply remove the Adsense code and put in the direct advertiser in its place for as long as they pay and once finished simply re-ad the Adsense code?
What you CANT have is "text-based or content-targeted advertisement(s)" on the same page. The definition of these must be fairly subjective.
Even affiliate links from text is OK.
You cant have more than one set of Adsense ads on one page also. Choose one of the vertical or horizontal formats.
Am I correct that AWA is here for both adwords and adsense forums since the two are tied together?
No, AWA is not:
[webmasterworld.com...] message #10
From what others have said, it seems that Google AdSense does not want additional text ads that are similar in appearance to the AdSense ads, whether they are in-house text ads that happen to look how AdSense/AdWords ads do, or ones that are part of another ad network.