Google Arbitrage – Still applicable?
Definition of arbitrage
Arbitrage in general is a method of taking advantage of the fact that there may be different prices in different markets for identical goods such as gold, foreign exchange or commodities. Simultaneously, one buys in the lower price market and sells in the higher one. For forex trading and sports trading there are some software that can help in this business, but in this article i will explain, what Google Arbitrage is and how you can start with it. I think its a good idea to make it work manually first, so that you can grasp the idea and basics and then for more serious work you can get some additional time saving tools like ebooks and software.
After some experiments with Google advertising (Adwords & Adsense), i noticed one interesting thing, that could be a way to make some profit online. It took two weeks or some to make tests, deeper research and fine tuning the technique once i accidentally found from the net that technique is called Google Arbitrage.
You will need basic knowledge, what Adsense and Adwords are or what they mean, so i recommend to see Google’s introduction page, if you are not familiar with these terms or setup.
Let me first show by a simple picture, what this is all about:
Interpreting from left, you use money to create and show ads primary on Google content sites (historical launch of separate content pricing) and secondary on Google organic search results (Adwords). Ads directs users to the sites, where you have placed sponsor ads (Adsense). Second dollar means, that you probably need to invest some money for creating and hosting websites, where you put your sponsor ads. Now, when visitors clicks sponsor ads you get money depending on how much they have bid for the ad keywords. If keywords on your sites are well choosen and high paying, then the ads, that are shown are also the most probably high paying. So as a result you can get more money from sponsor ads than you are spending on your own ads (3$ – 2$ = 1$).
This is a simple strategy to be understood, but based on my own experience, it is not so easy to implement. First of all, you absolutely need some money to get started and either good experience on marketing or good tools for finding right keywords. And without good luck you need to prepare to spend some time and money on testing and fine tuning the best combinations, ad positions, keywords density etc.
Basically, if going into the technical details, main purpose is to find minimum cost per click (CPC) and maximum click through rate (CTR) for your own ads simultaneously getting maximum CPC and maximum CTR from your sponsor ads.
This raises three questions, that by getting good answers should help to achieve better results in Google Arbitrage:
- How to find high paying keywords?
- How to get smallest possible CPC for your own ads?
- How to optimize page for sponsor ads?
1. How to find high paying keywords?
In this method you get money from users clicks to sponsors ads. Money coming from this source, must exceed both your own adverticing plus hosting. Because you get only some percentage of the price sponsor bids on his ads and you pay 0.03 – 0.05 (0.04 on avarage), you have a straight equation here:
(N % of sponsor bid * clicks) – (0.04 * clicks + hosting) = profit
That should show clearly, that you need to find keywords, that are priced far beyond 0.04, because not every click convert to money. Fortunately there are thoussands of keywords, that are paid several dollars, some even up to 70 dollars!
For finding right keywords you can use common sense and reasoning plus some tools, that are specially made for for high keyword hunting. All finance subjects are fine as well as lons, law, jewelry, web hosting etc. to mention some. But real key to the success is to find more specific, less general keywords, that still have a good search volume. If the keyword is too general, you never know what sort of people are coming to your site, what they have in mind really. But if you choose less common niche keyword and tie it to your ads, you can be more sure, what people are looking for and that way you can serve them better.
We really can talk about serving. Not just because we deliver web pages through machine called server, but because what we are actually doing here, is that we serve people by giving them appropriare information and references, where to find more information. We suggest them related products and services.
To shorten research gap, you can subscribe to several online services or buy some applications like KeyCompete, that makes everything much simplier. I have listed keyword research tools on another occasion, so you should look at there for more information.
2. How to get smallest possible CPC for your own ads?
This is the simplest and most straight forward part of the job actually. On Adwords you can bid on single keywords and also get listed on content ads. As you have found and used the most high paying keywords, its no sense, if you have to pay same price for each keyword to get people on our site. You would be losing money certainly.
The secret is, that you put very minimal money bid for each keyword and then fine tune the content ad price. I have found, that if i put price to 0.05, my ads are shown on content sites at very reasonable rate. Sometimes I can drop price to 0.04 even 0.02 and get ads still rolling. You won’t probably get much impressions and hits from Google organic results because you set keyword price as low as 0.05. People coming from organic results are often more quality traffic, but you can be quite sure, that people coming from content sites are also quite quality traffic. People are coming to your site, because they got interested and influenced by your ad, which was shown on meaningful and relevant content as accurately as keyword specific ads are shown on your site! You see.
By analyzing servers stats and visitors you can get even more important information, what people are for in your site. Setting up a poll an also be a good idea.
There are different schools, that emphasis opposite tactics for setting own bids. Tactic talked here aims for straight and maximum conversion rate with MINIMUM cost. Another tactic would be to bid maximum required money to get highest position on organic result and that way get all possible traffic to your site. In this case you need to find another method to make money, because Adsense revenue is just not enought to compensate used money. But if this approach interests you, you can find a good course called Get Google Ads For Free, that teaches how to find and use other adverticers to your site to compensate own adverticing debit. Sometimes i have also found important to make research about other adverticers bidding on adword. No suprise, there are applications for such work also like PPC Web Spy and Adword Accelerator.
3. How to optimize page for sponsor ads?
This is really tough question because there are so many variables, that affect to the result. It is easy to find, that creating wonderful content is a two edged sword. On the other hand, it should have as much new and pleasant content as possible, but as much from profit point, purpose is, that user clicks relevant ads, which makes money for publisher. If you use too much outgoing links, have disturbing non-relevant content or in some cases attract people too much, then there are more changes, that user does not click the ads. They perhaps clicks back button or closes the window. In addition to that it is said in Google Terms of Usage (TOS), that you are prohibited to tell people to click ads. Google just tries to make sure, people, which clicks the ads are really interested of the content that is adverticed.
So in theory optimal page has the information user is searching and has ads, which are the next thing, user is interested to click. But there are some fundamental principles, that should be stated to make Google Arbitrage method more clear.
You learned from the equation, that it is not enough to get people on your site. It is the conversion rate (CR) that counts after all. Better the conversion rate is, more the people clicks your site ads and more you profit. Let’s make another calculation here: You get 100 people to your site. Each have clicked your ads priced 0.04 on avarage so it makes 100*0.04 = 4.0 = money, that you have used adverticing.
You can expect anything between 0.5-30% conversion rate from your site. If you get 20 people of 100 clicking you sponsor ads (20% CR) and you get 0.2 per one click, then your total income is 4.0. We are at zero now! This means also, that we can play with three variables: CPC of your own ads (0.03-0.06 for example), CR (0,5-30% for example) and CPC of sponsor ads (0.2 for example).
Ultimate point of optimizing page is to increase conversion rate and getting high paying ads. There are several things, that are commonly experienced as good thigs for getting these two aspects better:
- disable borders, blend ads with content
- use either blue links or blend link title color with site style
- don’t use images
- give returning, loyal users ad free access to your services
- study and use channels for tracking and fine tuning
- place ad on high left side of the page content, 250*250 size seems to work well
- use horizontal and vertical link groups
- use ads on exit pages
How many pages, how much content, how many ads, text or images etc. these can’t be given exact answers. It depends on subject, target visitors, their behaviours and expectations. I recommend systematic tests using several combinations, changing them after some days and comparing results.
I didn’t joke when telling this is a tough question. You really need to experiment with right combination and layout. If you’re using WordPress as your blogging platform, you can have nice set of optimized layouts and themes, which work well with adsense ads. All this can some time and bux too, but good thing is, that it does not cost much to start and you can be quite sure, you will anyway get some of the used money back if following these safe guidelines. At the end of the article there is a tip, how you can get your first week or two free with Adwords, if you budget about $5/day.
Of cource by adding affiliate links and selling ads places to third parties you can expand possibilities, but that is an another subject.
Closing the case
I hope this has explained Google Arbitrage basics. This is a collection of information, that i have gathered through my own testing and reading several ebooks and people experiences on forums conserning the subject.
There are some pros and cons in Google Arbitrage. Good things are, that a) you get fast results and data for later marketing purposes, b) you’ll get real and valuable traffic to your site. This will affect to your site ranking as well.
Cons are, that ONE page and site probably does not give much profit, so you need to set up several sites to get reasonable monthy income. If you feel comfortable with this, you may become even more excited, when you hear, that there are some softwares, that are made specially to help and automize the process of creating a lot of niche sites. Keyword Elite was mentioned earlier. Another excellent program is HyperVRE. Both contains article search, spinning and processing, keyword analyzing and competition features, that really can help not only in this particular niche business but on internet business overall!
Another genre of useful tools are used to analyze Adsense data. Adsenselog and AdsenseTracker comes crucial, when you have dozens of sites and hundreds of adsense codes. They are not directly meant for profitting but log and analyze clicks and income stream. This data then can be used to pimp up adsense codes for better results.
As mentioned earlier, this is only one possible way of making money with ads. I would say, its not easy, but its not overwhelming hard. You need to know how to use computer, internet and some applications. When you have repeated the procedure, you will be quicker and more productive. To become really proficient in online marketing business, I recommend to combine SEO and PPC tactics as well as using traffic exchanges, safe lists, adverticing and affiliate market places.
Start up tips
You can get a coupon for Adwords marketing and get 50$ as a start up money after first deposit. Minimum deposit is 10$. You need to use coupon before creating and showing ads, because it is not eligable after that. I can tell you, that it is a good amount of money for getting in touch and practicing with Adwords marketing. This means you are on a secure way to get your first real dollars from marketing.
I had my first Adwords account from 2004 and i had made is with euro (€) currency. My Adsense account has always been on dollars ($). Soon i realized, that minimum bid could be same both in euros and dollars. Because of money conversion rate, it is cheaper to use dollars than euros! I made an another Adwords account with dollars currency and nasty thing is, that now i can get same traffic bidding $0.05 that i was earlier getting with 0.05€. Perhaps there are even better options for account currency.
Famous final words are in place here. Using Google Arbitrage has to meet some standards placed by Google or they will punish publishers by closing accounts. So when using this technique, make sure, that pages are not violating Google TOS. Careful thinking should also be considered for ethics involved with this issue. Clicking an ad costs advertiser, so making people clicking ads without real interest is suspicious manipulation. And if you are either afraid of using this method on your site or just curious about other possible ways to monetize or make money with blogging, you may be interested of WordPress Adsense System.
- Commission per sale, per lead or per click?
- CPA Marketing Woes
- Some perspectives to Internet marketing business
- How Not To Run an Affiliate Sales Campaign
- Why Article Marketing?
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is it cheaper to use dollar currency on google adwords? While lowest bid can be lower or higher in value because of currency, Google still uses microcurrency there behind, all bids are scaled from at least 0.0001 to 0.01. So in practice when I was testing this more, I found that with similar keywords and exact match I usually need to bid a bit higher like 0.07 in $ compared to 0.05 in €. Results told on original article were because I used phrase and broad matches. It didnt tell all the truth.