Adsense Arbitrage or Pay Per Click (PPC) Arbitrage is to pay low price for a keyword in an advertising program like Google AdWords, Yahoo Search Marketing, or Bing Ads and direct visitors to a page where you can write articles that has higher payout (e.g., insurance, car, betting, health, medicine, loans, etc.).
For example, Suppose you spend $1 for a keyword advertising your website. The keyword direct anyone clicking on them to a Web page that is optimized for a more expensive keyword that is five dollars per click. You get a 70% of the adwords price, $1.4 for every click. The profit will be $.40 per click.
Suppose you spend $100 in one month, and earn $140 in ad clicks, you make $40 monthly, presuming you get 100% clicks. You can get profit till you achieve 80% CTR; otherwise you are going to lose money.
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Important points to remember for Adsense Arbitrage/ PPC Arbitrage:
Content: The content published on the site should be useful, unique, and original without excessive advertising, and should have higher payout. Google use to prohibit those arbitrage sites who have scrapped content from other sites, gibberish content that makes no sense or seems auto-generated, duplicate content, or contents unrelated to the topic or business model. The CTR on content websites is generally 30%. Suppose you are buying traffic for 5 cents per click, and you get 100 visitors. The amount spent is $5. The 30% CTR means 30 clicks. The EPC (Earning per Click) is $.80. With 30 clicks, the income is around $24. The good quality content would increase the relevancy of ads and hence help the website to get high paying ads.
Adwords: Google AdWords allows subscribers to pay for advertising your local business on Google as both text and banner ads. The ads are targeted to keywords on the web page or search results page that displays the ad. Google AdWords offers pay per click, that is, cost-per-click (CPC) advertising, cost-per-thousand-impressions or cost-per-mille (CPM) advertising, and site-targeted advertising for text, banner, and rich-media ads. The AdWords program includes local, national, and international distribution. To maximize profit, you need to choose best keywords for Adsense. The principle in arbitrage adsense is to maximize traffic with minimum amount. Initially, low paying keywords should be used in the adwords campaign to divert traffic to the new website.
Negative Keywords: You should be well aware of the public looking for your content, articles, or blogs. You can save a lot of money in unwanted, worthless clicks that will never convert. You can add negative keywords on Search Query Reports in AdWords.
High Paying Keywords: The most expensive keywords to target are Insurance, Loans, Mortgage, Attorney, Claim, Gas, Electricity, Donate, Software, Trading, and Degree. The most expensive phrases are conference calling companies, purchase structured settlements, mesothelioma law firm, home owner secured loan, mesothelioma patient, debt problem, insurance auto, secured loans, car free insurance online quote, donate car to charity California, donate car in MA, donate car to defense attorney, car cheap Florida hire, online degree psychology, apply for a credit card, how to stop spam email, top web host, and many more.
Keyword Tools: The list of important keyword tools are Google External Keyword Tool, Microsoft AdCenter Labs, FreshKey, Soovle, Woodtracker, Keyword Discovery, Ubersuggest, HitTail, Advanced Web Ranking, RavenTools and WordStream.
Keyword Bidding: Keywords are used to focus on your potential customers. It is used to get the exact location and position of your ads. The keywords are words or phrases that people use to find your site. Yahoo Bing Network or Google Adwords use to auction the spaces in the website in the form of ads. You need to bid against other bidders to get the space you want. The keyword bidding feature helps advertisers either increase the number of clicks or reduce the costs of keywords. While higher bids will generate more impressions, the CPC will also increase. Low bids will result in low impressions, but your CPC will also decrease. The good strategy is to place a bid that lie somewhere in between the higher and lower end.