Google AdSense Arbitrage
In a previous post, I discussed the technique of using Google AdWords to send traffic to a site for a relatively small cost per click. At the end of that article, I briefly mentioned the concept of AdSense arbitrage. Which brings us to today's topic.
A while back, ShoeMoney circulated his largest AdSense check from Google. I have no doubt that ShoeMoney works hard and uses a variety of techniques to generate that kind of cash flow, but I also have no doubt that a good percentage of his earnings comes from AdSense arbitrage.
The technique is fairly straightforward although it requires a significant time investment to get started. What you're aiming to do is create a large number of low-cost ads that will drive traffic to your site where some percentage of your visitors will then click on other ads with a higher payout than your costs. I know some of you might find such a tactic questionable, but if in between ads you provide some valuable content to your site's visitors, then it seems like a win-win situation to me. It is, of course, your prerogative to disagree.
There are a couple of techniques for building ads around keywords. You can take guesses, look at your web logs for ideas, or simply use your page titles as a starting point (I use this last technique). Regardless of the path you take, you'll need to make use of Google's Keyword tool to get the actual phrases people use and to determine which ones are popular with searchers, but relatively unpopular with advertisers. You should target specific phrases rather than general ones.
For instance, if your page is about building widgets, you'll want to create an ad that is specific to building widgets and not one that targets the more general term widgets. More specific ads costs less than generic ones simple because there are fewer competing advertisers. Also, specific ads that very closely match the page's content will be deemed to be high quality by Google which will further reduce your costs.
When a user clicks on your ad in Google's search results, they'll come to your site, read about building widgets while also being presented with more generic widget ads. This happens because most advertisers don't know how or don't care to build very specific ads. You are taking advantage of the gaps in between generic ads and the more specific ads you build. That's the arbitrage part.
How long will this gap exist? I have no idea. Recent postings around the web seem to indicate that Google has already made adjustments that have apparently increased ad costs for arbitragers. However, I have not seen any impact to my campaigns so for the time being it seems that I'm OK in Google's eyes.