10.4 AdSense Arbitrage

Once you get to grips with the numbers that you see on the stats pages andyour logs, you might notice something interesting. You might see forexample, that you’re getting 5,000 ad clicks on a page each month and thatpage is generating $1500.

Divide $1500 into 5,000 clicks and you’ll realize that each click for that type of content is bringing you 30 cents.

That means that when you come to buy content, as long as you spend lessthan 30 cents for a click to that page, you’re going to make a profit. And oneway to do that is to open an AdWords account and buy advertising space onGoogle’s search pages. You could pay as little as 5 cents per click, giving youa profit of 25 cents each time your 5-cent users click on your 30-cent ads.

That’s AdSense arbitrage and it sounds like a foolproof way to increase yourrevenues.

If it were that easy, everyone would be doing it.

The first problem with arbitrage is that you can never get a 100% CTR. Notevery 5 cent click you buy is going to give you 30 cents back — and everyimpression that doesn’t result in an ad click is going to eat into your profits.

With these kinds of figures (and obviously, yours are going to be different),you’d need a 16% CTR to break even. (If every ad click costs 5 cents andgives you 30 cents, you can afford to lose five out of every six clicks or16%).

So if you can see that you’re getting a 16% CTR, buying advertising onAdWords to send traffic to your AdSense ads could be a good deal.Or not.

The second problem with arbitrage is that your CTR rate is based on userscoming from your current traffic sources. The users you buy throughAdWords might behave differently. They’ve already clicked on an ad once sothey might not want to click on an ad again.

Or alternatively, because you know they’re the type who do click on ads, it’spossible that they’re exactly the type who’ll click on the ads on your page.

Results from using arbitrage vary. Some people report that the clicks theybuy on AdWords give them less revenue, others report that they’ve increasedtheir CTR.

Some people are making SERIOUS money with AdSense arbitrage. The realkey to arbitrage success is buying traffic based on the right keywords. And todo that you need...