Understanding AdSense arbitrage

AdSense arbitrage is a simple technique that has been imagined by some internet "pirates" to automate the process of making money online. They use pay per click programs like adwords to generate traffic on a given website, then they convert the traffic into money using advertising programs like AdSense. This is of course against google TOS.

As you can imagine, the cheaper the traffic is, the better. That is why those unusual advertisers try to target the least competitive keywords even with low traffic.

The traffic is then directed towards an MFA (Made For AdSense) website. Of course, the website should be optimized to generate a high CTR and a high RPC making the eCPM really good and the whole business profitable.

Let's see it in action!

Traffic:

We have chosen to build a website on web hosting so we have to find keywords related to hosting (a competitive area) that are cheap to generate decent targetted traffic. We have chosen the following words (some typos and some other rare keywords):

Keyword	Average CPC	Traffic	Monthly Budget
cheep hosting	0,41	2810	1152,1
perl hosting	0,19	1100	209
webb hosting	0,22	3351	737,22
celeron server	0,33	590	194,7
AMD server	0,24	102	24,48
secure web hosting	0,28	3215	900,2
TOTALS		11168	3217,7

However, some arbitragers don't mind using irrelevant cheap keywords or other PPC advertising networks like Yahoo Publisher Network, Miva... to get cheap traffic even if it is not targetted.

The website:

We have built a one page website with no outgoing links. We have placed a paragraph about web hosting stuffed with high value keywords related to hosting (affordable web hosting, cheap web hosting, free web hosting.) followed by two large rectangles of adsense ad units.

An additional link unit is placed on the right hand side of the page instead of a menu.

Revenue:

To be profitable the website should generate a 30% CTR (possible given how we build it) and an average Revenue Per Click (RPC) around $1. Our profit will be as follows:

Profit = Revenue - Expanses

Profit = (11168 * 0.3 * 1) - 3218

Profit = 3350 - 3218 = $132 Make Money with AdSense

So we have managed to make $132 dollars doing almost nothing!

A shaky business model

As you can infer, this business model is really shaky and not sustainable as the least change in the business model parameters (CPC, CTR and RPC) can lead to some serious losses. In addition, such practices are actively fought by Google and all AdSense publishers using them are banned.