AdSense Arbitrage
How lucrative is AdSense Arbitrage?
AdSense arbitrage can be very lucrative. But it all depends on your commitment to the method and your understanding of how the method works. Let’s look at some numbers to gain an indepth undertanding of the potential of the technique.
Let’s say you bid a certain amount for an Adwords keyword and you get a certain amount when your visitors click on the ads on the landing page. How much would really make in the long term and is it really worth your while?
AdSense arbitrage facts and figures
Looking at few likely scenarios we can get a feeling of how profitable AdSense arbitrage really is. Firstly, let’s forget about smart pricing for now and let us assume that an AdSense publisher earns 60% of the AdWords price for every click on their ads.
Secondly, let’s look at the situation from the point of view of an AdSense publisher that has a healthy level of paid traffic going through their sites, so let us use the figure of 500 visitors per month.
Thirdly, let us factor in CTR’s. No AdSense publisher has CTR’s of 100% so we need to include this variable especially when we consider the that the publisher is paying for the traffic.
Total Cost |
Cost-Per-Click(CPC) |
Click-Thru-Rate(CTR) |
Total Made |
Profit |
$250 |
0.60 |
100% |
$300 |
$50 |
$250 |
0.60 |
80% |
$240 |
-$10 |
$250 |
0.60 |
60% |
$180 |
-$70 |
$250 |
0.60 |
40% |
$120 |
-$130 |
$250 |
0.60 |
20% |
$60 |
-$190 |
*Users: 500 AdWords Price:$0.50 AdSense Price:$1.00
Total Cost |
Cost-Per-Click(CPC) |
Click-Thru-Rate(CTR) |
Total Made |
Profit |
$250 |
1.20 |
100% |
$600 |
$350 |
$250 |
1.20 |
80% |
$480 |
$230 |
$250 |
1.20 |
60% |
$360 |
$110 |
$250 |
1.20 |
40% |
$240 |
-$10 |
$250 |
1.20 |
20% |
$120 |
-$130 |
*Users: 500 AdWords Price:$0.50 AdSense Price:$2.00
Total Cost |
Cost-Per-Click(CPC) |
Click-Thru-Rate(CTR) |
Total Made |
Profit |
$250 |
2.40 |
100% |
$1200 |
$950 |
$250 |
2.40 |
80% |
$960 |
$710 |
$250 |
2.40 |
60% |
$720 |
$470 |
$250 |
2.40 |
40% |
$480 |
-$230 |
$250 |
2.40 |
20% |
$240 |
-$10 |
*Users: 500 AdWords Price:$0.50 AdSense Price:$4.00
As you can see the numbers look favourable as long as the CTR’s are extremely high and/or the bid price and ad price margin is sufficiently large. But smart pricing has completely thrown the whole mechanism into disarray because it destroys the security previously enjoyed by previous AdSense arbitrage practitioners.
Those who use this method can no longer be sure of the margins between their AdWords bid price and AdSense CPC. For AdSense arbitrage to work you need to be sure of the 60% percentage price you are paid for every click. Then the only worry would be the variability inherent in the CTR’s. And this can be dealt with if AdSense publishers did their math and covered the CTR gap by ensuring that there was a wide enough margin between the AdWords keyword price and the AdSense Cost-Per-Click.