Talk about alliteration, but I’m not finished, arbitrage can be successfully done with any advertising. More generally speaking, publishers have been profiting from discrepancies between buying and selling advertising on their websites for years. The concept of arbitrage is simple. Buy advertising to bring customers to your property, and sell advertising space on your property for more than it costs to bring customers in. Traditionally, we’re talking about buying and selling advertising on a CPM (cost per thousand impression) basis only.
For example, I have a website about wedding gowns. And since it’s rare that I get commission on a sale, as wedding gowns are expensive, and times are tough in the economy these days, I sell ad space to cover the overhead associated with running a website. Currently, I’m receiving $50 per 125×125 button, of which I have 4 of, in the sidebar. So that means, I have to buy advertising that brings customers, preferably who are interested in wedding gowns, for less than $200 per month. The difference between what I charge to advertise on my site and the cost of buying advertising to drive traffic to the site is my profit for the month.
Of course, this arbitrage works better when 100% of the traffic is organic unpaid free traffic. Not only are the visitors genuinely interested in the topic of the offers on the site, but also since I didn’t have to pay for those visitors, the ad revenues are pure profit. So it pays to have good onsite and offsite SEO.
Google frowns on sites that do this because their revenues come mostly from advertisers on adwords, and when people buy bad traffic and send them to their site, their advertisers don’t continue to buy ads so it’s in everyone’s best interest to buy topically related traffic to your sites than to have someone uninterested in wedding gowns to hit a page about nothing but wedding gowns. Anyways, proceed with caution.