PPC Arbitrage question in reference to Jon's blog post

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deronsizemore

deronsizemore

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If you’ve never heard of PPC arbitrage let me just give you the gist of what it’s about. Very simply put, it’s like the stock market. Your main objective is to buy low and sell high, for maximum profit. Same thing here. Internet marketers are buying cheap traffic, and sending it to their sites with contextual ads on it, from such places as AdSense or YPN, thus converting the $0.05 clicks into $0.25 clicks.
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With regards to this quote in Jon's most recent blog post, I'm still trying to wrap my head around this whole concept. It says that "it's like the stock market. Your main objective is to buy low and sell high." With that said, are you basically using a service such as AdWords to advertise your site where everytime someone clicks on your ad you pay a certain amount of money? Then once they come to your site, you're hoping to either convert with them clicking your own AdSense/YPN ads, or signing up for one of your affiliate offers, etc...? So basically your are "buying low" by paying a low price for your PPC campaign through AdWords and then "selling high" by getting visitors to click on your ads which have a higher payout than you are paying for your AdWords PPC, therefore you have a profit? Is that about the right idea?

If that is the right idea and I'm not to far off base, how does the "buying low" work? Do you just search around for different niches and see what the PPC charge is and find one that is the lowest so you're not paying much for the traffic?
 


Yeah I think that is how it works. But I'm sure every niche has the high paying advertisers who get the top ads on adsense and then the lower paying people who end up paying a dime or less per click.

Does this work out well for content sites though? First, it would take some work to find out how to never pay more than a nickel or dime per referral and then you have to hope that most of these people click on your ads that earn you more money? Otherwsie you may end up losing money.
 
yeah, that's the basic idea. Two things... I think if you buy your incoming traffic using extremely specific keywords and bring ads in onto your site that are for the more expensive and generalized ones you'll do better at buying low and selling high. Also, I wouldn't limit this thing to Google. A lot of folks say they can bring in cheaper targeted traffic using some of the other companies.

A blog post I read the other day said that their key to making it work was found in filtering out unwanted types of traffic on one end, and filtering out low paying ads on the other. His example was that if you're selling ringtones you don't want to advertise to anyone with a cell phone, because not all cell phones can use 3rd party ringtones. So he tailored his ads to specific brands of phones that he knew to accept ringtones.
 
sometemple said:
yeah, that's the basic idea. Two things... I think if you buy your incoming traffic using extremely specific keywords and bring ads in onto your site that are for the more expensive and generalized ones you'll do better at buying low and selling high. Also, I wouldn't limit this thing to Google. A lot of folks say they can bring in cheaper targeted traffic using some of the other companies.

A blog post I read the other day said that their key to making it work was found in filtering out unwanted types of traffic on one end, and filtering out low paying ads on the other. His example was that if you're selling ringtones you don't want to advertise to anyone with a cell phone, because not all cell phones can use 3rd party ringtones. So he tailored his ads to specific brands of phones that he knew to accept ringtones.
Click to expand...

What are some other companies where you could bring in cheaper targeted traffic? I only know of Adwords, but like you said, not to limit it to just Google.

Also, when you're searching for targeted traffic with PPC, are you able to search the rates as well? Like does it let you target your traffic to your site from keywords such as "red widgets" and it shows you that for an ad campaign targeting your visitors for red widgets it will be $.05 a click that you will have to pay, but then on the other hand, blue widgets costs $.10 per click. Is this all information that these companies provide, or is it trial and error?
 
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