There seems to be a lot of questions and confusion about Adsense arbitrage. It has been made out to be a ?bad thing' and people have become weary to adopt the technique as an online business. There are also those who say that sending traffic to affiliate links is much more profitable than Adsense arbitrage. Lastly there are those who believe that Adsense arbitrage is easy money just waiting to be picked up. What is Adsense Arbitrage?

Adsense Arbitrage is buying traffic (PPC) from search engines at a low cost and selling the traffic to an advertiser at higher price.

Here is how you go about achieving this:

You identify keywords in a niche market with a low cost per-click. You direct the visitor to your landing page where your ads are. The visitor clicks on your ads which pay more than the ones you bought hence your profit is the difference between the two.

Is Adsense arbitrage a bad thing?

Firstly Adsense arbitrage is a legal way of making money online; there is nothing black hat about the concept. The problem occurred with the misuse of Adsense arbitrage, and just like the word alchemy (which for all realistic purposes means nothing more than chemistry, and was the term used for chemistry in the early middle ages) now has an occult or wizardry connotation to it. The bad name came about with the advent of the made for Adsense websites. As their popularity as a form of online income increased, sales of ready made Adsense websites went through the roof and the quality of many of these sites were bad, to say the least. Content on many of the pages was nothing more that a few words, if that much.

The focus was on getting people to click the ads on the page, without giving them any other alternative. With the focus squarely on the click there was no thought for the adwords advertiser, all he should do is fork out money for the Adsense website owner's pocket.

The net result of this is that the first warning you read in most information ebooks on adwords is not to advertise on the Google content network. Why is this? It became totally untargeted traffic which was of no use and worth zero profit for the advertiser. So away went loads of cash from the content network.

Is this still the case?

In broad terms no, there is still some of it around but after Google's slap and changing the way in which it gave quality score to landing pages from adword ads it was clear that this practice has gone out the window, and if you still want to do it be ready to hand over some serious cash for every click.

To quote Google directly from their page:

?Quality Score is the basis for measuring the quality and relevance of your ads and determining your minimum CPC bid for Google and the search network. This score is determined by your keyword's click through rate (CTR) on Google, and the relevance of your ad text, keyword, and landing page.'

This means everything has to be relevant and Google will check it. End of story.

Sending traffic to affiliate links, sales pages, does bring in sales. But in many cases the sales made on the first visit to a page are very low. So if you are sending traffic directly to your sales page without getting email details for follow up your ROI will be very low. Unless you get a subscription or offer a quality bonus for buying through your link it does not make a lot of financial sense. This is why Adsense arbitrage is a good option to follow if you are not well acquainted with writing squeeze pages or creating bonus products for your affiliate products.

For those who think making money with Adsense arbitrage is easy, think again. Yes it is a constant inflow of cash, but you are paying for that cash, and if you are paying more for your click that what you are getting paid you will have some serious cash flow problems to cope with.

A good knowledge of Adsense, adwords and the right business model is essential for your success with Adsense arbitrage.