So with this blog entitled, "Money with AdSense", you'd expect some discussion on AdSense Arbitrage.
And here it is.
AdSense Arbitrage is a simple concept, of buying a keyword on AdWords, and then directing it to one of your websites with an AdSense unit. For example, if you bought an AdWords ad for $1.00 per click, and you were able to direct it to your website, and earn $3.00 per click on AdSense, then you've made $2.00.
But as simple as the concept is, it's a rather complicated business model.
For one, the concept I described assumes you can get a 100% click through rate on your AdSense unit, which we all know, is impossible. If you can design a landing page that can get about a 50% click through rate, then you're in business. But to be profitable, you have to exploit a keyword where there is a large dropoff in bid prices.
That is, maybe the top 3 bids for a given keyword is $5.25, $5.20, and $5.17. But the fourth bid drops off to $2.25. There you go. You place a bid for $2.26, to get youself into that fourth position.
To ensure that AdSense displays the highest bidding keywords, you need to utilize a creative size that shows only two or three ads.
So first of all, is it possible to design a landing page that gets a 50% click through rate? Yes! I've done it. I described the technique I used in an article I wrote entitled, "Psychology of the Eye". The affiliate link is a simple web form that gets a 60% CTR.
Is AdSense arbitrage a violation of AdSense or AdWords?
Yes. It's stated here...
But it's up to the folks at AdWords and AdSense to figure out if you're engaging in arbitrage. Many publishers advertise through AdWords to drive traffic to their sites, but they publish sites with lots of content. Arbitrage sites, on the other hand, need extremely high CTR (such as 50%), in order to be profitable, and hence, publish very little content.
Steve's Opinion on AdSense Arbitrage
It's not worth it.
First of all, if takes a lot of dedication to find keywords with a large bid disparity. When you bid on one, you have to keep monitoring it to see if those higher bids come down on you. For the amount of time you're spending, and the amount of profit you're earning, are you any better off than just working at McDonalds?
You're also at risk of Google shutting your AdWords account down, or lowering your landing page score.
Lastly, it's a business model centered on gambling. That is, it requires a sizeable amount of capital, with no real guarantee of profit. You're basically gambling on the chance that the higher bids won't come down on you.
I don't do any Arbitrage at all. I haven't purchased keywords in the last several years. I've relied on my SEO and traffic building skills to get free traffic. If you build a site with lots of high quality content, that people actually want, that content will keep people coming in. In the end, you have a website that cranks out money like a machine with little effort or cost. That's the way to go.
But if you really have to know more about AdSense Arbitrage, read Grey Wolf's three-part series...