Adsense Arbitrage, To Use Or Not To Use
Arbitrage itself is a technique that has been used for quite a while especially on the stock markets. This technique became so widely popular that it has spilt over into other industries and Adsense happens to be one of them. So what is Adsense Arbitrage? How do you use this method to your advantage? Was Adsense Arbitrage not banned by Google on 1st June 2007?
Okay hold up!! Let's first take a look at some definitons of Arbitrage.
Buying securities in one country/market and selling them in another.
A technique employed to take advantage of differences in price. If, for example, ABC stock can be bought in New York for $10 a share and sold in London at $10.50, an arbitrageur may simultaneously purchase ABC stock here and sell the same amount in London, making a profit of $.50 a share, less expenses. ...
Profiting from differences in the price of a single security that is traded on more than one market.
The process of buying foreign exchange, stocks, bonds, and other commodities in one market and immediately selling them in another market at higher prices.
The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets.
How does this apply to Adsense? Well, you buy a cheap campaign via Google Adwords and you direct users to your site which has high cost per click keywords like $5 for a click. When users click on your ads then you get a higher payout than what you are paying for your ad. This in itself is not illegal. However, there are quite a lot of users who were using this method but in the 'incorrect way'. Scrapers, spammers and MFA (Made For Adsense) sites were really making loads of money from Adsense arbitrage but were not adding value for the user. Remember the saying "Content Is King", all search engines pride themselves on providing quality content sites. The problem with the Scrapers, spammers and MFA sites did not provide any valuable content at all.
This is the main reason Google decided to take action and start a campaign to ban these guys. I wrote about this in an article titled Google Becomes Strict With Adsense which discussed the issue of Google banning what seemed to be Adsense Arbitrage accounts at the time. After the ban though, it became apparent that accounts banned, although they mostly applied the arbitrage method they were in actual fact MFA and spam sites. Google wasn't totally horrible, ample warnings were sent to these users including letters telling them that they had an "unfit business model". They were paid out the balance they had earned but after that their accounts were terminated.
This was a good step by Google to remove useless sites and give legitimate websites a chance to earn a fair amount of money. The arbitrage method does not violate any Adsense TOS for now. Do practice caution when using this by making sure your website has quality content and adds value to the user experience or you will get banned eventually.
Hope this post was of help to you!