A reader's asked me for more information about AdSense arbitrage, specifically in reference to the AdSense Arbitrage — Still Alive and Well report that was released a couple of days ago. Are the methods it describes valid? Absolutely. Is it something anyone can do? Yes, but only with eyes wide open. It's not a game, after all, you can lose money if you do it wrong.
The idea behind any form of arbitrage is to take advantage of any pricing discrepencies in different parts of a market. You buy something for a lower price in one part of the market and sell it for a higher price in another part of the market. The margins can be pretty thin, which means you need to spend a lot of money to make a lot of money. Which is why you can lose a lot of money in the process.
AdSense arbitrage, which is also referred to as AdWords arbitrage, is essentially buying traffic via AdWords and making money from that traffic via AdSense. In theory this works anytime the per-click revenue you get from AdSense exceeds the cost of the ad that brought the visitor to your site. But in reality you have to factor in the clickthrough rate into the equation — most visitors probably won't click ads. So the ads on your site have to make you significantly more per-click in AdSense than what you spend per-click in AdWords. Which is why it's easy to lose money doing this.
Successful arbitrageurs do many things to make it all work:
- They monitor their spending vs. earnings on a regular basis.
- They use advanced strategies for lowering their per-click AdWords costs. (You should read AdWords Miracle for advice on how to do this consistently.)
- They find low-cost but very related keywords for their ad campaign. (Most use tools like Keyword Elite to do this.)
- They target their landing pages and the rest of the content on their sites towards the higher-paying keywords. (Again, using tools like KE or AdSense Accelerator.)
- They optimize their pages to get the highest AdSense clickthrough ratios they can. (Blending ads, placing them in the right spot, not providing too much information, etc.)
- They abandon obviously unprofitable arbitrages and move onto the next topic. The occasional loss is to be expected.
It definitely takes work to do it, and you have to be willing to spend money (on the ads, of course) to do it. A common return for successful arbitrageurs seems to be between 2 to 3 times what they spend on AdWords. So in theory, the more you spend, the more you'll make. But you have to get it right, and that's the hard part.
If you want to get started, I suggest you begin by opening
an AdWords account, which is almost free. Then start learning about AdWords before you try playing the arbitrage game. If anything, it'll be useful for you as an AdSense publisher to figure how things work from the advertiser's viewpoint.
Sponsored Link: Check out the AdSense Discovery training package while it's still at a low price.
Eric Giguere wrote Make Easy Money with Google, which is not the spammy get-rich book you might think it is, and is about to release (finally) Uncommon AdSense, a book aimed at more experienced AdSense publishers. And no, it won't be overpriced.