First off, the truth about Google Arbitrage is simply this - it doesn’t work anymore. You are at risk of getting your AdSense account disabled if you attempt it now. I still see a lot of people searching for this topic so I thought I’d write a post about it to give it some closure.

What Is It?

Google Arbitrage in its simplest terms is using Google AdWords to drive clicks to sites that have Google AdSense ads on them. There are many flavors of this as well as many critics of it. But back in the day, it was perfectly okay with Google’s TOS until they changed the rules about a year ago.

You can create niche information sites using a combination of public domain, modified PLR, RSS feeds, etc. I say information sites because you are not trying to sell anything. You are providing information to people who are desperately searching for it. I found in my own research that people who are looking for information are the

My point here is that you should create sites that actually benefit the reader in some way, i.e. providing the information they are looking for in addition to showing them related AdSense ads. The problem was that other webmasters who were short-sighted simply created sites that had little or no content but with AdSense splashed across the entire site hoping to make a quick buck. This became a such widespread problem and Google started to crack down and banned many accounts.

The Underlying Principle

The principle is simply to optimize the difference between clicks that you pay (AdWords) for and the clicks that pay you (AdSense) in such a way that it becomes profitable. In its heyday, this method could bring ROIs of 100-300%. That means for every dollar spent, you are NETTING $1 to $3 depending on the niche. On top of that, you can have strategically placed affiliate links within your content and those extra sales simply added to the bottom line.

All was well except for one critical point. This method depended largely on Google and their rules. Once they changes their rules, the entire game changed.

Lessons Learned

There are lessons to be learned from all this. First and most importantly, Google Arbitrage worked if you had a system. As with any business, you need to have a system for doing things and stick to it. The arbitrage system involved identifying potential niches with reasonable demand and click costs, registering a proper domain name, getting web hosting, building the sites, building ad campaigns to send traffic to the sites and finally a tracking system to determine profit/loss.

Lesson #2 is to have a backup plan or alternate income source. You have to consider what to do if your main income source dissapears as a result of external forces that are beyond your control. For arbitrage this is Google shutting down your account. If you’re doing PPC marketing, you could be priced out of your market by aggresive competitors. If you’re doing SEO, your rankings could drop off the face of the earth. Those are just a few examples.

The final lesson is to never stop learning. Keep up with what’s out there in terms of the techniques for driving traffic, marketing principles, branding, product creation, etc. Knowledge and skills are things that nobody can take from you. Read more

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