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AdSense
Arbitrage:
Arbitrage in general means taking advantage of prize differences of the same commodity in two different markets by buying the commodity in the one market to the lower price and almost simultaneously selling it in the other market to the higher price. The price differences may be quite minute but when a high enough quantity is traded one can still come out with a considerable profit. For example there might be a 50 ct difference in the gold prize between South Africa and the USA. One can capitalize from it by buying greater amounts of gold in South Africa and immediately reselling it in the USA.
AdSense Arbitrage would be generating traffic to one’s AdSense website via PPC advertising with lower Cost Per Click (CPC) compared to the Earning Per Click on one of the AdSense ads on one’s website. What sounds complicated becomes quite easy looking at concrete examples:
You could build a website around the high paying keyword “Mesothelioma” and related keywords like “Mesothelioma lawyer” (Mesothelioma is a kind of lung cancer mostly caused by earlier exposure to asbestos) . Top bids for the latter are usually around $20. You then generate traffic to this site by starting a Google AdWords campaign bidding on more general keywords related to cancer. Top bids here are only around $1. The traffic might not be “laser targeted “ but you still have a good chance of a profitable CTR . If only every 15th visitor clicks on a Mesothelioma-ad you still earn money.
Another way for profiting from AdSense arbitrage is to launch your PPC campaign on another search engine than Google which has considerably less traffic and therefore considerably cheaper top bids for keywords. You can purchase Miva or Enhance ads for a few cents when you would pay several dollars on Google. For example top bid on Google for “quit smoking” is $4 – 5, on Enhance it’s 10ct which can make for a huge profit even if only 10% of the visitors click on an AdSense ad. The downside is, however, that there will not be a lot of traffic from Enhance.
As noted under the definition of AdSense , since 2006 Google implemented so called smart pricing, which allows advertisers much lower bids when their ads are published on the Content network (i.e. other websites) compared to an appearance on the Google search result pages. This means that if you do a research on AdWords CPCs for a specific keyword and your research program shows a CPC of several dollars you still have no guarantee that creating an AdSense website around this keyword would not earn less than one dollar per click. Therefore AdSense Arbitrage has become much less interesting and would require a very thorough research on bid prices.
[Arbitrage has it’s origin in Latin arbitrary, arbitratus = to give a decision]
