I have been involved in PPC arbitrage for a few years now and have seen many of my competitors killed from adwords in the last month.
Google is actively looking at getting rid of the "poor" ad quality en masse and I have an opinion on this.
Firstly I know of many cases where Adwords accounts have been suspended due to "activity that is not in line with Google advertising strategy" - that means PPC arbitrage. Some of the high profile companies would include Geosign.
I believe that PPC arbitrage is better then MFA arbitrage - but at the end of the day it is a failing in ad delivery if these sort of ads can not be removed. But lets be honest that is NOT what Google or Yahoo wants.
Imagine if you can get 10 relevant ads for a query - that is 10 potential clicks before the user finds what they want. All relevant - but for all those clicks you can only have one conversion. That is the problem - better ad delivery, better CTR = worse conversion. Now you start to realise the scale of the internet as you compete with 10s if not hundreds of similar companies - even worse you pay for the "browsing" click and then they don't buy. Welcome to massive falling conversion rates over the next few years.
Ironically the old fashion bidding model precludes this type of activity - for example the old Yahoo (pre panama) system worked where best bid wins position - (not able to be manipulated except by paying hard cash)
I for one believe that Google are right to go after people that advertise on Adwords with the intention of making a direct profit from adsense on their site - however the distinction becomes blurred when you look at major players like ebay.
ebay are only at 50% at the moment of advertising on Google - but at the end of the day they use sponsored listings to backfill auctions they don't have - that in itself is PPC arbitrage.
As a side note, Ask.com uses a lot of PPC arbitrage to get traffic (loads) - so hope much "real" traffic do they have - probably none as when is the last time you typed in "ask.com" into the address bar!
So in summary - Adwords is becoming ruled by people who know how to game the system.
How many of you guys are making a profit from adwords?
Ultimately, Google has to sell its advertising space to people who are selling real product or services. In most circumstances I doubt they would see PPC arbitrage as any better then MFA arbitrage. Both would be sen as garbage manipulation of the system to game money out of it. Google has a very real interest in seeing quality win out over gamesmanship.
I suppose I am therefore out to game the system. But I didnt make the system and the measures over the past few years have not helped the people that needed it.
If eBay has pulled the ads then that is a big signal to look at your ROI and whether it is worthwhile using Google to advertise on.
I see advertising moving away from traditional PPC in the future - in the meantime there is always Google!
This isn't straight arbitrage however.. Straight search results arbitrage without any supplemental content is so easy it is doomed to fail as a business strategy.. Everyone can easily do it and most of the web development community considers it to be spam.
There's plenty of other stuff to do out there...
