How a Malaysian Made USD1243.17 in August 2007 Using AdSense Arbitrage
October 17, 2007 by Gaman
If you’ve been following AdSense news closely, you might recall that Google AdSense had been on the look out disabling AdSense publisher accounts that are doing AdSense arbitrage.
Since May 2007, a number of AdSense publishers had been receiving emails from Google stating that they have violated AdSense policy by running unsuitable business model and that account would be disabled. As it turned out, the email was sent to publishers doing arbitrage.
So what is AdSense arbitrage?
It’s basically a way to make money from sites with very little content or sometimes none at all. The sites, often called made-for-AdSense or MFA sites are typically created by scraping content from other websites and then littered their pages with ads from Google AdSense.
To drive traffic, the owner would buy pay per click traffic and send them to those sites. It’s called arbitrage because the AdSense ads on the sites pay more than the cost of the pay per click keywords. When the visitors click on an ad, the owner pockets the profit from the difference between the earning per click minus the cost of the PPC keyword.
Arbitrage exists in several forms and the one described above is the most likely to get the boot from Google. Other types of arbitrage include one that like the above but the webpage contains more content with a goal of generating clicks on the ads.
If I were to send traffic to Sabahan.com using PPC, I am basically doing arbitrage. However, I am certain that I won’t get the boot because I provide value to the users by presenting relevant and useful content. So as you can see, arbitrage can be a valid business model as long as it provides good users experience.
Other types of arbitrage include shopping engine arbitrage where a landing page compares the price of a same product from multiple suppliers. Another one is an affiliate arbitrage where the marketer creates a landing page to promote certain affiliate programs and use PPC to drive traffic to that page. Arbitrage exists because people want to take advantage of the inefficiency in the marketplace.
Yahoo & AdSense Arbitrage
Since the crackdown, it’s now become riskiest to get involved with MFA especially with one that offers no value whatsoever to the users. Some people tried to circumvent the rules by using other PPC search engines such as Yahoo Search Marketing (YSM) or Microsoft AdCenter. As it appears, some are able to get away with it, at least for the time being.
I came across an interesting thread over at CyberWang.com Forum about a guy who is making good money from the AdSense and YSM arbitrage combination.
In the thread, he shares his experience and progress as he continues to experiment with YSM & AdSense arbitrage. It’s interesting to see how his profit slowly increased as he increased his PPC expense. The most he had made so far from AdSense was USD1243.17 in August 2007.
However, keep in mind that that’s a gross profit before PPC expenses. You’ll get an idea in regard to his profit margin once you check out the thread. I think it’s a clever marketing ploy on his part as well where he uses the thread to sell an ebook where he reveals his methods in more details. Now I am giving him a free publicity at Sabahan.com…
From what I understand from the thread, his strategy basically involves the following steps
- Find thousands high paying AdSense keywords using certain tool
- Use a software to generate hundreds of blogs with AdSense placed strategically to maximize click through rates
- Drive traffic to those blogs using Yahoo Search Marketing
- Slowly increase your spending on PPC to drive more traffic
- Repeat the above steps
My first impression tells me that this is exactly the type of account that will get canned by Google. According to him, some of his sites get an incredibly high CTR. That’s a cause for concern if it were to happen to any of my sites as it would raise Google’s red flag.
Perhaps the reason why he could get away with it is because the clicks seem to be organic as they originate from outside of Google network. But sooner or later, Google will surely catch up. Then again, I haven’t purchased his ebook or visit any of his MFA sites so I can’t comment whether he’s violating any of AdSense policy.
While I know Google frown upon MFA sites created automatically, I don’t know what makes his sites different from the rest and whether they offer any value to the users – that’s for Google to decide.
How to Avoid Getting the Boot When Doing Arbitrage
My general feeling is that Google is only banning arbitrage sites that offer no values to the users. As a matter of fact, arbitrage is actually a valid business model and can be beneficial for publishers and advertisers.
Sites that produce poor conversion rates after the click won’t stay in the network for long. It may make the publishers rich in the short term but advertisers are looking for return on their investments. When the demand and supply is out of balance, Google may canned those publishers which in turn is actually good news for advertisers since it should weed outs bad publishers from the content network.
A Google spokesperson once said this is part of an ongoing quality initiative on its content network:
At Google, we are always focused on how we can make the user experience as positive as possible while still providing value to our publishers and advertisers. As part of this effort, we continually conduct automated and manual reviews of publishers and sites that violate our policies. In some cases, violations of our program policies will result in termination from the AdSense program.
So if you are thinking of getting involved in arbitrage, you need to ask whether your site provide value to users, if they don’t, expect to get the love letter from Google anytime.