I wanted to write this post to record my own experience with ppc arbitrage and what I’ve learned so far. I’m a regular viewer of forums like Wicked Fire, WebMasterWorld, DN Forum, NamePros, and several others. These are great places to get a feel for what arbitrage is and what the typical strategies are.

When you begin sending and converting traffic it can be somewhat daunting. Hell, even learning the language and the alphabet soup can be intimidating. If your interest is strong enough you’ll persevere and begin to pick up some of the jargon. Eventually most of the items being discussed in these forums will seem intelligible. You can learn a great deal from these forums only don’t expect to pick up anything that will enable you to retire. Those tidbits are not disclosed for obvious reasons. The second they become public knowledge their effectiveness will cease as everyone will begin using those techniques. You can pick up the basics and apply them to your own ideas and hopefully end up with something worth a damn that you too can withhold from the masses. Also, you can learn from others mistakes.

My own experience has been in attempting arbitrage to several different platforms or types of landing pages. Some people use content scraping templates that derive their material and articles from places like Wikipedia. These sites are built around a specific topic like mortgages and prominently display ads and articles. Typically the only options that the reader has are clicks that will lead to further ads and similar articles. The articles (content) lend to the reader’s experience of acquiring knowledge and thus, in theory, satisfying Google’s idiotic policy of “a better internet experience” or some similar sanctimonious, holier-than-thou horseshit (see previous post). This content is essential to maintaining some standing with Google that will prevent the arbitrageur from being booted off of Google’s Adwords network (more on this later). Other people drive traffic to sites that promote affiliate offers or coupons of some kind. These strategies have a similar premise: buy traffic at a cheap price to send to a site+feed said traffic high paying ads under the guise of relevant and enriching content=make money. This is a bit of a simplification as there are many more elements and complexities that go into the equation but the gist is pretty much accurate.

My most successful campaigns have been completely devoid of content as they have focused strictly on sending traffic to parked pages or parking arbitrage. This is really the most basic way you could really do arbitrage as the only work involved with the domain is pointing it at the correct server and knowing which keywords will result in the highest payouts for resulting ads. This isn’t always easy as even slight variations of the same thing can result in drastically different ad values.

I don’t recommend this strategy for those individuals who have their domains parked at all but a couple of parking companies as it is totally against most terms and conditions. There are a couple that will allow this and they also happen to have the best payouts in my experience. Send an email to mackristo@searchiot.com if you’re curious who these are.

If you are interested in this technique, I would recommend focusing on such niches as insurance and other financial services. My typical earnings per click within these niches have been roughly $1.50-$2.80. For more specific just do some testing. ALWAYS, and I cannot emphasize this enough, make sure that you are only sending traffic from the United States. Traffic from other countries will often pay shit. I’ve had click values that stayed consistently at $1.65 per click that dropped all the way to .04 cents a click when the traffic started coming from other countries. You can usually control this on Google (while you have an account there that is), Yahoo and many other search engines.

Sending traffic to a parked page is only one way of doing arbitrage but it has been successful for me. In order to be successful you need to research the hell out of a lot of different things, experiment with different keywords, ads, niches, and general strategies. You need to understand what you can afford to spend and what degree of risk is present in each campaign, or put another way, how many visitors must click on an ad (or convert) for you to break even with your spending on the ppc search engine that you’ve chose? Put even another way, how many people out every ten visitors must click an ad for you to avoid losing money? Obviously we’re not doing this to break even, so taken even further what level of conversion will be required for you to make money. Even further, how much will you need to spend to convert enough of those people at the calculated rate for an acceptable return. Some may say any consistent profit is acceptable provided that it can be replicated over and over again.

These issues present many more issues and offer a lot to discuss. In the coming posts I hope to tackle some of them and also focus on other areas of the arbitrage equation such as traffic generation.

Technorati Tags: ppc arbitrage, arbitrage, Adwords, parking arbitrage