If you just read about AdSense arbitrage somewhere, and were wondering if you should jump on the bandwagon, the short answer is no, you should not waste your time and energy on AdSense arbitrage. I am going to tell you why in just a minute.

Before I proceed, let me briefly explain to you what AdSense arbitrage is and how it is done today. The way it works is that: first you would find a content niche that has some high paying keywords in either Google AdSense or Yahoo YPN, then you generate a big list of low-cost keywords surrounding the high paying keywords. You then use the low-cost keywords in a google Adword campaign to drive traffic to your Made for Adsense webpages that are stuffed with high paying keywords. For example, if you can generate traffic at an average of 10 cents per click to your MFA pages which generate ad clicks at an average of $1 per click, you would break even on this AdSense arbitrage campaign if you can achieve a click-thru-rate of 10%. Anything above that CTR would earn money in your pocket. Once you successfully found a profitable niche, you repeat this process and setup more niches. Sounds simple. But before you jump in, let me explain to you why I think AdSense arbitrage is dead.

Keyword Cost/Earning Gap Shrinking

The whole premises of AdSense arbitrage is to exploit the inefficiency in keyword pricing in the marketplace. In other words, you rely on a huge gap in prices between what (dumb) advertisers pay and what you are hoping to pay for the same set of keywords in a certain niche. The bad news is that advertisers are getting smarter with the help of, unfortunately, you. You basically taught the advertisers with the early success of your AdSense arbitrage campaigns that they should bid on more keywords. For the most part, they have much bigger budget to acquire tools that make this process easier for them. The end result is that it is increasingly harder for you to buy low and sell high.

Google Improving Its Algorithms Red Is the Color of buy

In most cases, AdSense arbitrage involves creating MFA pages that are low on content but high on high-paying kwywords. Google knows that while it may make more money in the short term, but in the long term, it will suffer if this whole MFA things drive away its advertisers because of low return on investment. Google has improved its conversion quality tracking capability so that it will deliver lower paying ads to your MFA sites if they determined that conversion rates are low on your site. This could easily turn your profit making AdSense arbitrage business into money-losing business.

AdSense arbitrage is not Auto-pilot

Many internet marketers tout that AdSense arbitrage is easy to implement and once implemented it can be on an auto-pilot. This is just simply not true. Like I mentioned above, the keyword landscape changes constantly in your chosen niche, and Google is constantly improving its algo to improve the entire ecosystem’s efficiency. That means you have to constantly monitor your AdSense arbitrage campaigns. And because AdSense arbitrage is a number game, i.e. you have to have a lot of MFA sites to make money (because each AdSense arbitrage page only makes a tiny profit). Imaging if you have 50 campaigns, and 50X1000 keywords, how much effort you have to put in to just maintain these network of MFA pages.

In conclusion, if you are considering using the simplest AdSense arbitrage approach to make money, my advice is that there are better ways to make a living online. The only plus side of AdSense arbitrage is that you learn a lot about the niche that you target and you could change your business model to a profitable one (e.g. paid subscription if it makes sense).

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• Google AdWords Keyword tool – use this tool to find out synonyms of your keywords and average estimated Cost per Click price. Another great feature is to use the ‘Site Related Keywords’ option to discover your competitor’s keywords.
• SEOBook’s Keyword Tools – this great tool gives you an estimated search traffic for your keywords on Google, Yahoo, MSN. Very handy tool to find out if there are sufficient volume for your keyword rich content pages.
• webconf’s website keyword suggestion tool – feed this tool with your domain name it will return a list of keywords you can try writing your content and the search volume for each of the keywords.
• Marketleap’s Keyword Position Verification tool – you can check your Search engine ranking for your chosen keywords that you spent so much time trying to do SEO …
• Keyword Rich Domain Names – this tool comes handy if you don’t yet have a domain name for your keyword rich website idea.
• A Bonus: Digital Point Keyword Tracker – if this is your first hearing about this tool, you are out of luck. It requires you to have a Google SOAP API key, which Google no longer gives out anymore.

There are also commercial tools you can buy. I heard that Keyword Elite is a decent tool but I have no experience with it.

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The spirit of the story is that: for one, you can’t take the easy shortcut, which in this case, this guy was basically using blackhat techniques to generate a lots of sites that generated $60k monthly Adsense check. Secondly, you can’t put all of your eggs in one basket especially if you work hard to develop a legit business online. For example, you have to mix Adsense, affiliate marketing, etc.

Nevertheless, the success of Adsense did and continued to feed a lot of online business directly (with Made for Adsense sites etc) and indirectly (with all those internet marketers that create tools and services that cater to the MFA crowds). Everyone is enjoying it while the party is still on and nobody is questioning the party will be over one day.

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There are three different ways you can use to make money online.

Selling Products Or Services

In this case, you have created some, hopefully, unique and useful products that you can sell. It could be physical products like an iPod killer or virtual products eBooks. Amazon.com is a great success. Or you developed some expertise in your professional area and you can offer your service to other people that are in need of your service. When your service is delivered through the internet, it could become very powerful. Youtube.com is essentially a video sharing service.

Another example of service providers is the web hosting companies, web designers / developers, and search engine marketers etc. These are all good money-making professions.

Affliate Marketing

In this case, you are selling other people’s Products Or Services. This is most appropriate when you realize that you are the type of people who likes to create stuff but you have a great skills for marketing and sales. Affiliate marketing could be very lucrative if you do your research and find great niche products to sell.

Internet Advertising

Internet advertising are essential to the success of the first two groups, which is why it is the fastest growing segment of the multi-billion dollar advertising industry. Google is the clear leader in this space with its Adwords advertising program.

Internet publishing (blogs, photo-sharing, video-sharing etc.) benefited from the huge growth in advertisers’ internet spending. One of the most significant product is the Google Adsense program, which single-handedly changed the business of media publishing, allowed numerous small, independent publishers (anyone who writes on a website:-) to make a nice profit from internet publishing.

So which one of the above money making methods is for you? It really depends on who you are and what you want to be. I would say most of the people that are making money online have two or more revenue streams so that they are not dependent on any one source.

This blog will not limit itself to any particular money making technique either. In the months and years ahead, I will post greater details on all sorts of techniques. Hopefully you will enjoy the journey as much as I do.

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