Arbitrage

A practice through which web publishers – second tier search engines, directories and vertical search engines – engage in the buying and reselling of web traffic. Typically, arbitrage occurs when such publishers pool client budgets to engage in PPC campaigns on Tier I search engines (Google, Yahoo!, MSN). If the publishers pay $0.10 per click for traffic, they typically resell those visitors to clients who bid $0.20 or more for the same keywords. Successful arbitrage requires that the arbitrageur must pay less per click than what the traffic sells for. The variation called Affiliate Arbitrage involves a web site owner or blogger bidding on keywords from programs such as Yahoo! Search Marketing or Google AdWords, who then links the ads, either to their own web site, or directly to a merchant site displaying ads (from programs such as the Yahoo! Publisher Network or Google AdSense).