What is Traffic Arbitrage

An example user journey looks like this: a user sees an ad related to a specific keyword. They click the ad but instead of being directed to the offer, they are directed to a SERP page with search terms related to an original keyword. They may choose to click the specific query which then will lead to the concrete offer.

Benefits

The benefits of the traffic arbitrage model are in the double qualification mechanism, where a visitor has to click twice. This ensures that the offer is more fitting to them and allows the marketer to present more offers in the first place.

Where the money is being made

Traffic arbitrage is a game of small commissions and big numbers. The differences between paying for original traffic and reselling it to offer owners are marginal, so only large-scale operations can ensure appropriate revenue streams. This necessitates the use of a proper tracking service in order to maximize the ROI.

Traffic arbitrage requirements

There are the following requirements for marketers to successfully dive into traffic arbitrage.

• Sufficient Ad Spend: To gain approval from feed providers and access traffic, a daily ad spend in the range of three to four figures is typically required. This demonstrates your commitment and capacity to effectively engage in arbitrage.
• High-Quality Traffic: Take the time to understand the specific criteria set by feed providers for accepting traffic. Sending traffic that lacks quality, such as non-converting or riddled with bots, can lead to the suspension of your account. Feed providers employ sophisticated tools to assess Traffic Quality (TQ), so maintaining high standards is imperative for success.

Traffic Arbitrage Models

There are different traffic arbitrage models.

Search-to-Search:

In this model, you acquire cost-effective traffic associated with a specific keyword. Subsequently, you redirect this traffic to a feed provider targeting the same or a closely related keyword, albeit at a slightly higher cost. This approach leverages the price differential between keywords to maximize profits.

Display-to-Search:

This strategy involves the procurement of banner-based traffic, which tends to be more budget-friendly. The acquired display traffic is then directed towards relevant search results. This model serves as a prudent starting point for traffic arbitrage endeavors due to its comparatively lower initial financial risk.

Native-to-Search:

The objective in this model is to secure affordable traffic from native advertising platforms. You subsequently redirect this traffic towards search result pages. By capitalizing on the lower acquisition costs associated with native traffic, this approach aims to enhance profitability when directing users to search results.

Social-to-Search:

In this variant, traffic obtained from social media platforms is channeled towards search result pages. Similar to the display-to-search model, social traffic often presents a cost advantage. This can simplify the process of achieving profitable outcomes, as the upfront expenses are generally more manageable.

Popular feed providers

Feed providers are platforms that generate SERP pages with offers. The popular platforms are as follows:

Popular feed providers:

• Google AdSense
• Yahoo
• Bing
• System 1
• CBS Interactive
• Sedo
• Tonic
• Domain Active

Final thoughts

In conclusion, traffic arbitrage is a dynamic and multifaceted strategy that involves acquiring web traffic at a lower cost and monetizing it to generate revenue.