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It's also a waste of a learning curve. If you spend hundreds of hours building a conventional site and it tanks, at least you can translate the skills you developed to another project, and build on your experience. Spending that much time mastering a business which is gradually becoming obsolete just seems futile.
No it certainly isn't easy money. It pays me less than minimum wage for the time I put in producing content and setting up Ad campaigns. This doesn't include payment for keeping track of the stats on a regular basis or maintaining bid levels.
As a get rich quick scheme - forget it.
I'm not doing arb, but I have nothing against it in principle if it adds value to the user (ie helps them find something that they might otherwise not) and thus the advertiser too.
My most efficient campaigns come close(ish) to paying for themselves, but even when I've tried as an experiment to make real net revenue I've failed. I have a real site, real organic traffic, real content, deep-ish pockets, a little brains, and some time to spare, and multiple paid traffic sources and ad networks, and still didn't manage it.
So, forget "get rich quick" unless you are very smart and lucky and have deep pockets, etc. And it may not be "rich" or "quick".
the arb game only last until the market discovers your system and or ( in this case ) keywords. what I have come across in learning about this "game" is that spending 3 to 4 hours per week working on improving your site's ranking will help the cash stream with the organic traffic.
The Arb Game, from my experience ( not the AdSense - AdWords ) overnight you could find some people with deeper pockets whacking you out of the game. Let me find some similar related issues that happened to me and maybe it might help you in the end.
ever see your favorite keyword overnight cost you a lot more than before: it's 1 of 2 things, new player ( easy to discover ) or an established player getting ready to kick you out of that word
ever see your cost go up on a few keywords ( related ) just a few pennies ( just enough to drive you from the top 3 ). That's a new arb confirming the market is viable, get ready, he's about to spend some money.
one of the tricks that I was able to use in the pit was to move around, how this correlates is to develop multiple web sites ( all your favorite topics ) and keep on growing them using the 40-30-20-10 improving rule ( 40% to the top earner, 30% to the next one, 20% to the next one 10% to the R&D), this way you don't have to get whacked out of all the markets at the same time.
what is Adsense Arbitrage?
When you buy traffic at a low price and they click out at a higher price. But not everyone clicks an ad. So you have to calculate cost per click, the real cost per click including the cost of visitors who don't click.
If you have a five percent ctr that means 95 of a hundred visitors that you paid for don't click. So the five that DO click must click on ads that are worth more than the cost of paying for 95 visitors that did not click.
PS Step 1 gets harder all the time.
So, to find arb that works you have to find a (possibly new) sector where the advertisers and the users/buyers (for example) are fairly bad at finding one another without help.
However, as the advertisers (or users or SERPS) get smarter the arb will disappear out from under your feet.
This fact is true with all arbitrage business in any sector not just adwords/adSense. However it is also true that Google is not allowing efficient markets to evolve. With the introduction of QS, Google has created further imperfections creating more opportunities for arbitraging.
Many webmasters feel that QS is knocking off arbitraging, however IMHO , the opportunties for arbitaging have INCREASED. A smart operator can create a page with a decent enough QS and mint money of advertisers who are paying higher on a/c of QS hit. I see multiple opportunities in various niches. This QS thing seems to update every 2/3 months and is not a regular process. Many smart guys can and do use this window to make a lot of money.
Changing a domain and hosting is cheap. This is what is actually happening.
Done right..It adds value by preselling a concept / idea and providing better conversions for the advertiser.
For the publisher , the obvious gain is more income.
For the surfer it helps in providing direction.
DONE BADLY it is the famous MFA , who can and do get banned...
The dividing line is very thin....It can and does get blurred.. often..
An arb takes my visitor at a cheaper rate to the arb specific page, then send them to the advertiser better converted?
>For the publisher , the obvious gain is more income
How is that better than the original advertiser paying the original publisher without an arb paying less and charging more in the middle layer?
>For the surfer it helps in providing direction
Again, adding a layer is better for the surfer?
Excuse my inability to comprehend, please do explain more.
Maybe this thread would be better received in the Adwords not the AdSense forum :-)
[edited by: Hobbs at 11:17 am (utc) on Feb. 19, 2007]
I suspect that the move is a function of a) the highly focused nature of direct navigation traffic; b) the filtering, smart-pricing and anti-clickfraud measures undertaken by the larger, first-tier parking players (Google, as overseeing feed provider to parked domains and the first tier parking companies, as self-interested defender of their business model); c) the low cost of traffic generation associated with an inefficient market, a marketing space about which many people aren't aware of how well it can work or who have acted based upon rumor rather than direct testing with first tier providers; and, d) the industry reports that upwards of 15% of the major search engines PPC traffic is derived from direct navigation parking systems, i.e., that's a lot of very focused traffic, particulary traffic focused on 'real deal' domains (non-trademark typos and like ilk).
I'm not sure I should publicly acknowledge this situation - the growing evidence of arbitragers targeting parked domains - because I'd rather see more direct first tier advertisers appearing on the landers - but if I'm going to be a victim (I park domains) of those seeking maximum advantage from lowest cost traffic sources then letting the cat out of the bag is in my own interest.
Free markets and efficient pricing are only efficient when and where there's equal access to information. To whatever degree more people wake up to what others are doing to gain an advantage by exploiting inefficient pricing of direct navigation traffic then all the better for the free market - and me.
[edited by: Webwork at 2:28 pm (utc) on Feb. 19, 2007]