I have written in the past what to do when your website is blacklisted by search engines. Another problem that websites face from time to time is that their traffic drops for no apparent reason (particularly from Google) or for reasons that the operators are not aware of.
That is exactly what happened to one of my readers. She writes, “I used to get around 3,500 visitors daily but about two months ago my website lost some 70% of its traffic (mostly from Google, since it provides over 90% of my traffic). I did add AdSense around the same time and initially attributed the problem to that. When I removed the ads, there was a brief recovery, but then it dropped right back. I decided to put my advertising back since I could not afford to lose any more money. Since then, I have added new pages and have tried to look for errors but nothing has worked. What is happening to my blog? Is Google penalizing it for some reason?”
I wish anyone knew. Google maintains complete secrecy, for obvious reasons, about how its search engine works. As you can imagine, the spammers are invincible and all search engines try their best to beat them. In trying to do so, it fairly common that some good websites (either because they were unknowingly doing what spammers do or there was an error in algorithm) are mistakenly identified as bad and get seriously hurt, sometimes forever.
To the best of my knowledge, Adsense or any other decent advertising platform on a blog has no effect on search results at all. What is important to remember is that unless you have done nothing wrong, the rankings depend so much on what is happening to the whole Internet since it is all interconnected. We all know that the web today is very dynamic and literally changes in real time.
Do you think you lost one or two links from authority websites? Were the websites that linked to you themselves got penalized in some way or shut down? Did you engage in an aggressive link-building campaign? That can sometimes cause this type of huge drop.
I would say that do not do anything major at this point. If you can, try to add as many pages as possible on a regular basis. Hopefully it will come right back within 30-90 days (based on our experience).