Does Google penalise for alot of advertising on your site?
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I look after the search side of a decorating website on which we carry a large amount of advertising from external brands as that is our business model. Do you know if we would get penalised for having too much advertising - would it be deemed to affect the user experience? Many thanks for your help on this.
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Yes, the percentage of real estate on your site that is dedicated to ads will lower your rankings organically.
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Advertising per se will not harm your site--as long as it isn't hampering the user experience. HOWEVER, no paid advertising on your site should provide any algorithmic value to the advertiser. Ads should be clearly labeled as such and need to be nofollowed in order to abide by best practices.
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Kentaro is correct. Google does have a page layout aspect to its algorithm. The known aspects are the frequency and placement of those ads. If a page is too ad heavy, or if the ads are placed in a way that destroys the user experience you can rank lower.
If your page looks like this you could have problems:
ads ads ads
ads content ads
ads ads ads