Google put a major "bull's eye" on "article marketing" this year with their countless Panda Updates, which have hit duplicate content solidly between the eyes. While article marketing didn't exactly die in 2011, one can argue strongly that Google did indeed put it on life support.
This happened mainly from the fall-out of the Panda Updates... panicked and shell-shocked webmasters and site owners soon realized Google was judging their WHOLE site in regards to how much unique quality content it contained. Supposedly, those sites who Google found lacking in this regard, were instantly and ruthlessly lowered in their rankings. Some major sites, including some very major article directories, dramatically saw their search traffic from Google fall over 50% or more overnight.
Many of these same webmasters quickly started deleting, de-linking or nofollowing those articles on their sites which could be considered non-unique since these articles also appear on other sites around the web. Some sites like Buzzle, even deleted unique articles which was a little puzzling, to say the least. At the moment, anyone can still submit an article to Buzzle, but you are not allowed a link out - not even in your profile!
If all sites on the web followed Buzzle's drastic measures, article marketing is definitely not on life support, but is truly dead and buried. While this deadly assumption is a little premature, one has to realize that if webmasters and site owners believe using third party articles downgrades the quality of their site in the eyes of Google, then article marketing in general, does not have a bright future.
However, we must make a major distinction here, the above scenario involves non-unique articles, those which any site owner can use as long as they include the resource box. In the not so distant past, this type of viral article marketing was extremely effective for building quality one-way links from important sites on the web. All you had to do was write a high-quality informative article on your favorite subject and countless webmasters would pick up the article and place it on their sites - with your crucial backlinks attached.
Of course, this was before Google started to place changes in their algorithm to counter all these links or view them as less important since they were attached to duplicate or non-unique content across the web. Those sites which too heavily relied upon article marketing to build their backlinks have suffered greatly over the last year. With a few exceptions, those marketers who only submitted unique articles to sites have faired better because this material is original and Google has no choice but to index and rank it.
One also has to realize, Google is not attacking the article per se, but poor quality pages or sites which give their web searcher a poor quality experience. Many times this poor experience comes from a badly written article or from a visually unappealing page covered in affiliate ads. No one can or should critize Google for wanting better content on the web, since everyone benefits from that ambitious goal.
Whether or not content is original and unique will always be an important factor in how it ranks and unique articles have probably grown in importance over the last few years. Thankfully, most sites on the web will still take original content from writers and contributors. These unique articles still have a major role in any site's marketing strategy - no matter how many hurdles Google puts into play.
Google can still downgrade even unique articles if they appear on sites they consider to be "content farms", a label which has now become the ultimate "put-down" for sites on the web. Some SEO experts now believe Google even has the ability to read articles and tell whether or not they consist of high quality content or not. Besides low quality, the main objection or conclusion is that these articles are not written by true experts or qualified people in their field. Who wants to rely on say "cancer treatment information" by a writer who is paid $5 an article?
Point taken, but just because a general site covers numerous related topics, doesn't necessarily mean that site is not important or relevant for the searchers looking for information on different topics. Thankfully, in this age of Twitter, Facebook and even Google+, those site visitors will cast their own votes as to what content they find relevant and worthwhile to them. And hopefully, other site metrics such as bounce rates, time spent on site, pageviews per visit... will also rescue quality articles and content from any Google overzealous updates or judgments.
Marketers and webmasters must also realize that there is traffic outside of Google on the web. Even if Google has lowered the importance of articles, it doesn't mean those articles don't bring in quality traffic, especially if they appear on very popular sites. In this sense, articles will always play an important role for any webmaster or marketer.
So while article marketing and article directories have taken a few steps back in the last few years, mainly because of Google's algorithm changes, it is still a viable marketing strategy. Especially when it comes to placing unique articles on keyword related sites and getting those valuable one-way links back to your own content. There will always be a place on the web for a well written informative article that gives the searcher what they're seeking for on the web. The article is dead, long live the article.