I’m sure many of you have heard of pay per click arbitrage, a method used to make money online. This is probably why you have landed here to begin with. The digital marketing world has been using this method for years. However, is pay per click arbitrage a scam? Is it something that you should stay far away from when it comes to online marketing?
For starters, pay per click arbitrage is one of those techniques that will never go away. Someone will always be able to take advantage of an arbitrage opportunity for at least some period before that particular opportunity ceases to exist.
Pay per click arbitrage is not what most people think – it’s not a bad thing or a scam
Some of you might be taken aback by what I just said… Yes, it is NOT a scam! That word ‘arbitrage’ might sound scary to those who don’t fully know what it is. But the truth is, it is all around you.
To see that pay per click arbitrage is not a scam, you first need to understand what it is. To be honest, you probably are already using pay per click arbitrage techniques for your online marketing without realizing it.
In fact, if you are capable of finding a pay per click arbitrage opportunity, it is one of the surest ways to make tens of thousands of dollars in a very short period, as long as the scalability isn’t limited to a couple hundred bucks.
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In its simplest form, pay per click arbitrage is the act of paying an ad agency (like Google Ads) money in exchange for traffic to your website. After the users get to your website, you convince them that you have valuable information or products that they can benefit from if they pull out their wallet.
When they make the purchase, you hope to make more money from each customer than the amount of money you spent in ad dollars to get them to your website.
You may not directly make money from that user who visits your website; however, you may have a model that allows you to make money indirectly from them when they share your content or give you their email address.
Introduction to Pay Per Click Arbitrage and Ad Buying Method One
Let’s take a look at a more specific example of what pay per click arbitrage is. Maybe some of you are not familiar with Google Ads, so let’s use Facebook ad buying as an example:
Again, pay per click arbitrage (also known as click arb) is when you have a website that buys traffic from one place (Facebook, in this example) in hopes of visitors clicking and landing on your website/landing page, converting based on predefined goals, and making you more money per conversion than what you paid to get them there.
Ever notice advertisements on your Facebook News Feed or sidebar? Often, those ads are scarily relevant to your recent search history, your demographics, or your interests. That’s because some website owner targeted you, and others like you, using a host of information because for some reason, they feel that they have something of value to you.
If you click their advertisement and convert to a subscriber, buyer, or whatever goal they are trying to achieve, their hope is that the return equates to more than what they spent to reach you with their ad.
Real Life Example to Make Money Online with Pay Per Click Arbitrage
Put simply, if you paid $0.10 for 100 visitors to come to your website, that’s a total of $10 for all 100 visitors (.10 x 100). The goal is to make more than $10 from those visitors once they land on your website, bearing in mind that not everyone will convert. How would you do that? Well, if 30% of your visitors (30 visitors out of 100) convert on your page, and each converted visitor is worth $0.50, you would make a total of $15.
However, you just spent $10 to get them there, so your profit is $5 ($15-$10). You would keep doing this, scaling your ad dollars as much as you can, for as long as the click arbitrage opportunity exists. You may be wondering what happens to the other 70 visitors… absolutely nothing! They came to your site and didn’t act on anything; therefore they did not convert. In the world of digital marketing, we say that these visitors simply “bounced” without taking any action.
They came, looked at your content then left. It might sound like that is a waste of 70 visitors, but I can tell you from experience that getting a 30% conversion rate and a 50% profit ($5 profit/$10 spend = 50% profit) is marketer’s dream. Once you see that this works, all you have to do is increase your spending budget, and revenue goes up as well without any additional work.
Pay Per Click Arbitrage Gurus
I’m sure there are pay per click arbitrage gurus out there currently making more than 50% profit and straight up crushing the game, however, these guys are few and far between. They keep their secrets close to them and will not disclose what they do or even HOW they do it.
They know that once they tell you, the pay per click arbitrage opportunity will be gone from them due to competition (i.e., countless people bidding on the same keywords that they need to make themselves profitable for the product they are selling).
That is just one version of click arb. There is also another version where you bring visitors to your site for a certain price per click, get them hooked on your content and clicking to more pages on your website. By doing that, you increase the probability that they will see a product or something that they like, click it and thus complete a conversion.
Introduction to Pay Per Click Arbitrage and Ad Buying Method Two
If you ever clicked on a post about cute pets, a funny compilation of photos, a list of “fails,” etc. on Facebook… something like, “Here Are the Ten Funniest Cat Fails,” or “12 Awkward Celeb Couples You Didn’t Know Dated,” chances are you were once a victim of a pay per click arbitrage opportunity (but a more unethical version than what we previously discussed). Once you got to that post, the website made you click through each photo page by page.
Obviously, they could have all ten photos on page one to make it easier for you to scroll, but they don’t. Intentionally. They want the page views because each pageview means that you are more likely to be shown a new ad.
Each page only had a few paragraphs below the photo for you to read. It sucked because it took forever to get through if the content was good. If the content was bad, well it didn’t matter because somehow, you got hooked because you love cats and have time on your hands to look at all the funny photos.
It took forever to get through because of all the Google Ads that were plastered all over the damn site. This stuff, unfortunately, is still around (I guess there are people still making money from it); however, it was much more common a few years ago (somewhere around 2010-2016).
So, if you ever run into something like that, or have not before but eventually will, now you know what the goal is for the website owner. If you ever fall victim to this type of content, RUN! It’s a pain in the arse to make it to page 10. During that process, you will probably click on a handful of ads by accident because you mistook the advertisement as being the place where you need to click to go to the next page.
This is an example of what I would consider pay per click arbitrage spam. It isn’t a scam but is definitely spam. A scam is when you spend your money and ultimately get cheated in one way or another, but spam is when you get bombarded with information that you don’t want or need.
Current Pay Per Click Arbitrage Strategies for Website Marketing
People are currently employing pay per click arbitrage, and bloggers are actually joining in on the fun as they learn about the benefits. Being in the game long enough, I can now spot this technique whenever it is being used. For example, Millennial Money Man uses this technique. He buys Facebook ads to his site, knowing that his blog has valuable information that people are willing to pay for (and even teaches a course on how to do this).
Not only are people willing to pay for it, but through some ad buying optimization, he can buy these visitors at a low cost (a cost that makes him profitable) and convert them into paying visitors that purchase his courses or e-book (whatever is being sold). If you have the credibility from your visitors and have something of value to sell to them, this is a very good method to make money as a blogger.
Why wait years to build up your traffic to 300,000 pageviews or more a month when you can just buy the visitors by displaying your ads on a platform and making the money back once they land on your site? Honestly, it’s a no brainer if you have the budget!
You don’t have to worry as much about search engine optimization or keyword research (although those should be a key part of your overall strategy). You get to focus more on building great and engaging content as well as creating valuable products for your visitors to purchase.
Why Pay Per Click Arbitrage is Ideal for Bloggers and Online Marketing in General
Click arb is a great way for bloggers to make money online because it helps with diversification. You can now try this method on a handful of different platforms and spread out your risk which in turn reduces your earning fluctuations. You now have full control of how much money you will earn month over month for your blog, especially as you refine. Your only constraint is the investment capital needed to scale out.
If one day Facebook, Twitter or Pinterest decide to change their algorithm so that you are no longer getting as much organic traffic from them, I can say with absolute certainty that those paying for the traffic will not be affected to the same extent. But as I said, paying for traffic only works if you can do it AND be profitable. If you are not profitable, I would hope that you are at least getting email subscribers or something of value that will come back in the form of either money or more traffic later.
The Effects of Algorithmic Changes on Pay Per Click Arbitrage
Algorithm changes have already happened with Facebook. Back in the day, if you had one million Facebook followers, it was like free traffic. It was a gold mine. Every time you made a post on your page, a large portion of your followers would be shown this post which in turn would lead them to click to your website.
Now, however, they have changed their algorithm so that even if you have the same one million followers, you won’t be getting the same amount of free traffic as before. It is as if the number of followers on your Facebook page is useless. One million followers on Facebook used to be able to bring you over 1,000 page views a day without having to spend a dime!
People made hundreds of dollars a day (some were making thousands per day) by building up a Facebook page to millions of followers and sending them to their website to convert them with their content.
Conclusion
Pay per click arbitrage is not a scam, nor should you be intimidated by it.
It is a great way to make money online in the digital marketing world. You can make lots of money in a very short period because your constraint is not how much free traffic you can get to your blog each day but how much capital you have to keep paying for visitors.
Keep in mind that even with pay per click arbitrage, there are limits. With an unlimited budget, you will reach a point where each additional dollar spent per visitor actually decreases your overall profitability. This is not necessarily a bad thing but definitely something to look out for and to understand.
To figure out the cap on your advertising dollars, you may need to do some financial forecasting. Due to our background in statistics and finance, we have actually built a model for a client who wanted to know exactly how much money they needed to spend before the pay per click arbitrage opportunity stopped being as profitable.
