Arbitrage is a word you probably have heard around the blogosphere. So what is it really? Wikipedia explains that arbitrage is the practice of taking advantage of a price differential between two or more markets. So basically you want to capitalize on the imbalance. Still don’t follow? Ok let’s make this easier, say you make a new hockey website with Google Ads on it. You buy an AdWords campaign with a limit of $25 a day to bring traffic to the site, at the end of the day you have made $50. So you are paying less per click for the traffic. So there is the imbalance right there. There are a few different types of arbitrage that I have tried and I will explain them to you below.

Adsense Arbitrage
This is probably the most popular type of arbitrage. It is just like I explained above, but you probably won’t turn out with a profit by making a hockey site. The thing about arbitrage sites is it is not about the content, these are sites that are made to make you money, not something you should care a lot about. So make the content quick and to the point, but whatever the content is make sure it has high paying keywords. Some arbitrage sites I have created are about sleeping pills, protein supplements, and of course male enhancement pills. These keywords pay very, very high! Also make sure your adsense units are very visible so people will click them. Now getting traffic to the site, you can either create an AdWords campaign or use other services like adengage to get traffic to the site. I have seen 2x to 8x profits from this type of arbitrage. Now you do have to watch as Google may ban you for doing this.

CPC & Commission Arbitrage
There are many advertising services that offer products some of them include Amazon, TTZ Media and Shopzilla. They will provide ads of specific products. You want to find a service that offers a set CPC rate like TTZ Media does. So think of a popular product, say an iPod. You make a site called iPod deals with a ton of TTZ Media ads. Just like with Adsense arbitrage you want to drive traffic to the site, once people go to the site you hope they click the ads and you get your set amount per click. You hope that you make more from the clicks than you are putting in for traffic.

With any type of arbitrage you are looking for a 50% click rate or higher. As you know your CTR depends on the placement of the ads, so make sure they are very visible. Also people who make a lot of money on arbitrage don’t even mess with low paying keywords, they want to make the most for the money they are spending on traffic. These people spend a large amount of money on traffic, because usually if you have a good keyword in arbitrage the more you spend the more you will make.