So, you want to get into traffic arbitrage?
Before we dive in, let's look at a definition of what arbitrage actually is...
ar·bi·trage is defined as "the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset".
So, in the case of online traffic sources, we would be going out and finding a traffic source and then finding a marketplace or other network that we could sell that traffic right back to and make a profit.
We're essentially becoming a middleman.
This is the same thing that the traffic networks do themselves with publishers and advertisers.
Now, while this simple formula may work in theory, I've found it's usually pretty challenging to buy traffic from one source and make any sort of profit from just directly pointing that traffic to a different network.
If it were that easy everybody would be doing it.
So, as a marketer, you need to think outside the box a little.
I use a method I call "stacking".
Instead of direct linking one traffic source to another single one, I'll basically create a site that I own and control and layer it with multiple different ad network widgets...
And then I'll start sending traffic to that website to measure whether or not I'm profitable.
If I'm not, I'll tweak some things, like split testing different traffic sources and ad networks, to see which one will pay me the most.
And once I am profitable, I'll simply buy more traffic to scale.
So, where with pointing one traffic source to another I'm relying on trying to be profitable with a single margin, with the "stacking" method I significantly increase my chances of being profitable with very little extra effort.
An example would be, maybe I'm planning on buying my traffic for $2 CPM, which means I'm going to be paying $2 for every 1000 visitors.
All I need to earn is a little over $2 CPM consistently in order to make a decent profit.
So, if I sprinkle the site I'm sending traffic to with maybe...
- One banner that pays me .30 CPM
- Another banner from a different ad network that pays me .50 CPM
- And a pop under ad from a different ad network that pays me $1.75 CPM
That's a total of $2.55 CPM
So, while a .55 profit doesn't seem like all that much money - it's super easy to scale.
Once you know your numbers and margins, and you're profitable, all you need to do to make a ton more money is spend more money.
So, if you wanted to make $100/day profit all you would need to do is reverse engineer your numbers in order to achieve that.
With this example you would need to spend $363.62/day to make $100 profit.
$363.62/day = ($100 / .55 = 181.18) then take (181.81 x $2 CPM)
So, if you're considering getting into traffic arbitrage, here are a couple of solid traffic networks to help you create your own custom online traffic arbitrage strategy...
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