Catherine "Cat" Seda

Sunday, October 08, 2006

Pay-Per-Click (PPC) Arbitrage

“Arbitrage” is taking advantage of price differences in the market.

Some pay-per-click arbitrageurs make an extra $10,000+ a month. Want to know how?

First, they host ads on their sites/blogs. Google AdSense and the Yahoo! Publisher Network are two popular programs that pretty much let anyone become an ad publisher. Next, arbitrageurs bid on pay-per-click ads (for example, through Google and Yahoo!) as advertisers. If they pay less for buying clicks than what they receive for the ads hosted on their sites/blogs, they’ve made an easy profit. That’s basically pay-per-click (PPC) arbitrage.

Here’s an article I recently wrote: Search Arbitrage: Good or Evil? As a marketer, do you love or hate this practice. Why? As a consumer, how do you feel when you click on a search engine’s PPC ad only to get another page of ads? Would anything make that a good experience?

P.S. BUSINESS OWNERS: Want to make extra money from ads? In my new course, I show you a simple, non-techie step for putting ads on a blog in less than 5 minutes (psss…watch lesson #7 on the Google AdWords CD-ROM).


  • From an online marketer's perspective, PPC arbitrage unethical and frustrating because these sites provide no real content because they are littered with PPC ads, wasting the users' time. Users go online to find answers fast, and sites like these provide little value and instead divert searchers away from their actual search goal. Having to compete with PPC arbitrage ads isn't that difficult other than they probably raise the cost per click. It will be curious to see how Google and Yahoo respond - hopefully it's sooner than later...

    By Anonymous Anonymous, at 8:02 PM  

  • Arbitrage ads are easily identified even at the pseudo-code level -- patterns of layout, no relevent content -- and could have been easily filtered out long ago. Google, notably, has been using absurd logic in trying to force legitimate advertisers to raise their minimum PPC bids. Thanks to your article I now realize that in part Google may be acting in an excess of zeal, nothing new. Yet I suspect someone with actual brains is also using arbitrage as an excuse to jack up CTs on legitimate advertisers. We have been expecting this for a long time, it merely happened six months before our prediction.

    By Anonymous Anonymous, at 10:45 PM  

  • I have nooooo problem with content sites and blogs making money by hosting ads. They should. But when the ads ARE the content, that's a pretty poor user experience.

    I've got it! If the search engines really care about quality user experience, then why not require PPC advertisers who redirect users to "ads-only" landing pages to say in their ad copy "Click here to see more ads!" I'm guessing nobody would click.

    By Blogger Cat Seda, at 11:57 PM  

  • I like that requirement... Click here to see more ads...

    may have to see what CTR I can get with that!!!

    By Blogger AussieWebmaster, at 7:13 AM  

  • Frank,

    GREAT! Lemme know how that copy works for you. :-)


    By Blogger Cat Seda, at 9:40 AM  

  • nice selfish plug - hey thats what blogs are for? right?

    By Anonymous Anonymous, at 4:30 PM  

  • Arbitrage is a cool method for webmasters trying to make money and from their standpoint I don't think it's unethical.

    For advertisers, however, it is a complete waste of money and it is completely outrageous that G and Y allow it. The content network is not used in most of my client accounts for this reason (and others).

    By Blogger Keith Holloway, at 4:14 AM  

  • Keith,

    Good point. Yup, I also always disable contextual advertising for my PPC clients. Only companies ready to manage it as a separate campaign from search, and are prepared to police it, should play there.

    By Blogger Cat Seda, at 11:23 AM  

  • I keep coming across sites like this one and wondering about them...I assume this is the thing you are talking about?
    So when a user clicks on a ppc ad, they go to a page of only sponsored listings? Is this the same thing as arbitrage or is it different?

    By Anonymous Anonymous, at 3:48 PM  

  • "ads-only" site. There's no content, just Sponsored Links. So yes, if you click a PPC ad and are directed to this site, this is an example of arbitrage.

    But not all abitrage is bad. For example, check out and click on "Get Healthy."

    See the "Ads by Google" box? Perhaps The Food Network does PPC to drive clicks to this page, to make a profit when people click these Google ads. This is an informative web page (and site); so generally speaking, I would consider this good arbitrage.

    What do you think is good vs. bad arbitrage? Or, is it always good or bad?

    By Blogger Cat Seda, at 4:50 PM  

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