Senin, 13 Juni 2011

AdSense Arbitrage

Once you get to grips with the numbers that you see on the stats pages and
your logs, you might notice something interesting. You might see for
example, that you’re getting 5,000 ad clicks on a page each month and that
page is generating $1,500.
Divide $1500 into 5,000 clicks and you’ll realize that each click for that type
of content is bringing you 30 cents.
That means that when you come to buy traffic, as long as you spend less
than 30 cents for a visitor that clicks on an and, you’re going to make a
profit. One way to do that is to open an AdWords account and buy
advertising space on Google’s search pages. You could pay as little as 5 cents
per click, giving you a profit of 25 cents each time your 5-cent users click on
your 30-cent ads.
That’s AdSense arbitrage and it sounds like a foolproof way to increase your
If it were that easy, everyone would be doing it. Or at least trying to do it.
Arbitrage is possible but it’s never been easy and Google works hard to make
it even harder.
The first problem with arbitrage is that you can never get a 100% CTR. Not
every 5 cent click you buy is going to give you 30 cents back — and every
impression that doesn’t result in an ad click is going to eat into your profits.
With these kinds of figures (and obviously, yours are going to be different),
you’d need a 16% CTR to break even. (If every ad click costs 5 cents and
gives you 30 cents, you can afford to lose five out of every six clicks, or
16%, before you’re in the red).
So if you can see that you’re getting a 16% CTR (and very few publishers are
seeing clickthrough rates that high), buying advertising on AdWords to send
traffic to your AdSense ads could be a good deal, although you’d need lots of
traffic to make the profit on each click meaningful.
The second problem with arbitrage though is that your CTR rate is based on
users coming from your current traffic sources. The users you buy through
AdWords might behave differently. They’ve already clicked on an ad once so
they might not want to click on an ad again.
Or alternatively, because you know they’re the type who do click on ads, it’s
possible that they’re exactly the type who’ll click on the ads on your page.
You won’t know until the program is running.
And spotting the opportunities will take a lot of effort and some headsplitting
Arbitrage works by exploiting gaps in bid prices for advertising space for
select keywords. Advertisers looking to promote their sites that sell “grass
fertilizer,” for example, might have entered the following bids:

Bid 1 $2.37
Bid 2 $2.25
Bid 3 $1.95
Bid 4 $1.55
Bid 5 $0.75

Pay 76 cents for a click on an AdWords unit then and that user could be
earning you anything from 80 cents ($1.55 - $0.75) to $1.62 ($2.37 -
$0.75), minus the losses from users who don’t click the ads, of course.
Google though doesn’t reveal all of the bid prices it receives. Throw a
keyword into the AdWords traffic estimator and you can see the average
estimated CPC. (For “grass fertilizer” the range was actually a much narrower
$1.07 to $1.47).
But that range can hide a lot of information. If those are the only two bids
then the difference is 40 cents, which might provide some scope for
arbitrage. But if there are 40 other bidders each bidding a cent more than
the last then it’s possible that you’d be paying $1.08 for a user and selling
only a small fraction on for $1.09. You’d be losing money.
In the past, it was possible to gain a fuller picture of bid prices using
Overture’s Keyword Tool but Yahoo!, which bought the ad firm in 2003,
disabled the tool in 2007. Now publishers who want to practice arbitrage
need to use Wordtracker to gain a more detailed idea of keyword prices.
But even that’s not going to be completely accurate because of Smart

As we’ll see in Chapter 10, Smart Pricing is an algorithm used by Google to
adjust the price that a publisher receives for a click on an ad. The better the
publisher, the more he or she earns.
How exactly Google decides which advertisers to pay more and which to pay
less isn’t clear but it appears to have a lot to do with the actions that users
take after they click the ad.
For arbitrage practitioners though it throws a huge unknown variable into the
calculations — exactly what Google intended. A large gap in bid values may
be filled by Google lowering the fee paid for a click even when an advertiser
has agreed to pay more.
So where does this leave AdSense arbitrage?
It leaves it as a challenging practice but not an impossible one. The principle
still applies: if you can find keywords that generate higher payments on your
website than you have to pay for them — and you’re not losing the profits
through a low CTR — then it might work for you. But those users have to
convert as well as click and you’re going to have to work hard both to
identify those keywords and track the figures to make sure you’re not losing
The stats that Google provides directly through AdSense are vital
information. But they’re not comprehensive, and they’re not the only data
that Google supplies. In the next chapter, I’m going to discuss another
Google tool that reveals important information about your site, including its
AdSense performance.
Warning: It may sound appealing to buy cheap traffic and send it to your
site in hopes of big AdSense profits. This technique rarely works and is likely
to get your account banned.

Tidak ada komentar:

Posting Komentar