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AVS is far from dead, although like everything else, it's changed a lot. I can't talk for straight AVS because all of my experience is in the gay market.
When AVS was the only show in town, webmasters could get away with putting up three pictures on a page and saying, "Click here for more." But now, with paysites, free sites, link lists, and TGPs, it takes a lot more than that to get the surfer to pull out their credit card. In my experience, the best AVS sites are hub sites that go on forever (preferably in the same genre or niche) offering preview pics, hot copy, and lots of cross selling from one gallery to another.
A lot of webmasters want to mass produce five sites a day with a couple of preview pics, submit them to every AVS on the planet, and then, complain because they don't make money. If you want to learn how to make better AVS galleries, e-mail your sponsor and ask for their help. They will know better what sells with their traffic. Whether they reply is another thing ... I find e-mail response from most sponsors is pretty abysmal.
Cheers
Dzinerbear
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