March 18, 2016
We want to point you in the direction of the top five ad networks for an arbitrage strategy.
If you’re not up to speed on what arbitrage is, read on. It’s quick and painless: The gist of arbitrage is that you buy low-cost traffic to your site and then convert it to positive net revenue through CPC ad earnings… And other monetization strategies too.
“It’s kind of like the alchemy of the digital ad world,” according to Genius Digital Ad Cat
As any ad pro will tell you, the key success factor is getting to a net profit. If you spend more money getting the traffic to your site than you make from it once it’s there, you’re not doing it right — Stating the obvious here (at least I hope that’s obvious).
Now before we jump into the guts of optimizing your arbitrage strategy, here’s an important reminder: You shouldn’t use an arbitrage strategy as an excuse to abandon all content, SEO (search engine optimization), and social media marketing efforts. Good content and the ability to get organic (i.e. free) traffic to your site is still important. After all, you’re not going to do much better with profit margins than with free traffic.
Back to arbitrage. Start thinking of it as a traffic in, traffic out equation.
By the way, we sort of lied a little bit in our headline. We’re not going to give you the top five networks. We’re actually going to give you 10 instead. That means the five that we think is a good source of incoming traffic. And then another five that we think you can use to monetization that traffic once it gets to your site.
We have to optimize both sides of our equation.
What are some of the key factors in a good traffic sourcing network?
• Low CPCs. If the traffic isn’t cheap, there will be no margins to exploit with arbitrage.
• Sticky traffic. If it immediately bounces, it’s a bad traffic source. The more bounces, the lower your ad click conversion rate, and hence eroded margins.
• Engaged traffic. Surviving the bounce is step 1. But the more pages the user visits, the greater potential that you close the deal on an ad click. This is a function of the quality of the network and the accuracy of the targeting.
• Users that click ads. This should go without saying, but we’re going to say it anyway. If your traffic flow isn’t clicking your ads, it’s next to worthless to you in an arbitrage strategy.
• No Bots. You don’t want ad networks that let bots sneak in and burn your ad budget up. Every false click is cash out of your account. If the bots get through, your arbitrage strategy will sink like a rock.
• Geography. Location, location, location, am I right?! To get high CPCs you need to bring in traffic from “tier 1 countries.” But it doesn’t end there, so networks work best with English speaking countries while other have more of a global reach so make sure you choose one that is the right fit for you.
Here are our favorite five ad networks for buying arbitrage traffic
• Facebook Mobile Ads
• Bing Ads
• Hashtag Ads
• AOL Gravity
Facebook Mobile Ads
These days, it seems like there may be 1.5 Facebook users for every human that was ever born on Planet Earth. And they share enough information that Zuckerberg probably knows the color and style of their underwear by now.
The key is that Facebook’s traffic is largely mobile driven but most advertisers are still targeting the desktop crowd. As long as Facebook mobile traffic isn’t heavily monetized you can find an opportunity here to drive quality traffic for cheap. Actually we have a super secret hack that we’re giving away for free to drive quality traffic for real cheap from Facebook
Here’s where tough decisions need to be made. If you want to take your arbi. seriously then it’s time to make a decision on content recommendation network.
Why do you need to choose just one?
Because Taboola has all but come out and said its no longer friends with RevContent. This means that you can no longer have both RevContent and Taboola on your page. It’s the arbitrager’s Sophie’s Choice if you will.
If you decide to go with Taboola as a monetization solution, and there are good reasons to do so, which we will get to in the monetization section of this post, then you should probably buy traffic from them too. That is, if you want to eventually scale up your operations.
Bing Ads is a new addition to our list for good incoming arbitrage traffic. Think about the obvious here. When you’re a major player like Microsoft, competing against the de facto leader Google, you have to find a way to be competitive – in order to gain market share.
One way is to give prospective advertisers cheaper CPC rates. Also, let’s not forget that it’s about supply and demand and Bing just doesn’t have that much demand. Bad for them but great for you if cheap CPCs is what you’re after.
These guys still have that new ad network smell but fear not…they’re actually legit. Though still in Beta, Hashtag ads has a great concept and drives quality social content for cheap.
By putting advertisers and social influencers together. The influencer has a network of loyal fans that engage with his or her content on a regular basis. You have a wallet full of ad spend waiting to be unleashed on the right target audience. Now all that’s left is good targeting.
One caveat you may find is that every Hashtag Ads campaign has a minimum of $100 ad spend out of the gate. That can be a tough pill to swallow for arbitragers looking to maximize their margins. Then again, arbitrage is all about risk, and this is one worth taking because the traffic you get is high quality and very inexpensive.
AOL acquired the Gravity network. We think it was a good acquisition. Their backup plan was sending out flash drives with free Internet connection service on them. Like RevContent, Gravity is in the content recommendation business. They try to differentiate based on their assertion that they have “personalized 1:1 targeting”. But remember that big ad networks build relationships with major publishers. So testing another large ad network is a good idea. See how you perform with their publisher network ad inventory.
While we’re at it, there are five more options here. Other mentionables:
• RevContent – if you decide not to monetize with Taboola
• Gmail Ads
• Yahoo Gemini
What are some of the key factors in converting your traffic into profitable arbitrage driven ad revenue?
High CPCs. See the pattern here? Get your cheap traffic in, but monetize it as profitably as possible. The higher the CPCs you convert, the better.
CPM Availability. CPM is cost per impression, or monetizing your traffic just based on ad exposures alone – and not clicks. The benefit here is that not every visit results in a CPC ad click. However, if you’re running CPM ads as well, that can supplement your revenue and help you achieve (or grow) your arbitrage profit margins.
High CPM. You might have spotted this one coming. Well, of course, you’re absolutely right. Not only is the availability of cost per impression ad inventory important, high paying CPM rates also work in your favor for arbitrage strategies.
Reporting. If you want to run a scaleable operation you need data. Not all ad networks provide you with the data you really need to perform at a high level. This is definitely a consideration when choosing a network.
Here are our favorite five ad networks to monetize your incoming arbitrage traffic:
• Google AdSense
• Amazon Associates CPM ads
• Google Native
Remember that optimizing your strategy is about testing.
Each of these ad networks are options for you to try. Depending on your particular content niche, some will likely perform better for you than others. And it’s your job to find out which ones are the best performers. Always keep in mind the traffic in, traffic out arbitrage equation.
If you’re able to harness low cost traffic, you still have to maximize the ad earnings you generate with it.
Ok, remember that our job isn’t to give you a list of stuff you haven’t heard of before. We’re starting out with Google AdSense because it’s the biggest and potentially most successful network for you. If we didn’t mention it here, we’d be doing you a disservice.
Simply put, the bigger the network, the more advertisers and competition that it brings in. That pushes CPC bids up and that’s precisely what you need to be successful with arbitrage. At the end of the day Google AdSense is still the go to network for ad monetization until proven otherwise.
While the ad rates may not be as high as rival networks, we like Taboola because they have arbitragers in mind. In fact, they just launched a new tool that will tell publishers which referral source is bringing in the most advertising dollars.
This allows publishers to better understand how to scale their operations profitably. This new tool symbolizes the biggest wink in the direction of arbitragers from Taboola then anyone could have imagined.
Here’s the rub though. If you already read the Taboola section we wrote on buying traffic then you know what we’re going to say. Taboola doesn’t play nice with RevContent and it would seem like their company strategy is to stranglehold their competitors to submission.
That means you can’t have RevContent and Taboola both on the page. In the future, we’d expect that Taboola would frown about any other content recommendation network besides their own on the same domain.
First of all, Kiosked is mostly for English speaking countries. If that’s not your target audience, move on. If you watch the Kiosked video on their site, you’ll see why they made the list. They have a variety of high impact ad formats, many of which are inline.
That sort of elegant ad placement can perform extremely well for you. They manage to get the attention of the user without making them feel like their experience is being adversely interrupted. You have the opportunity to get more ad clicks, but also higher CPC with their premium advertisers.
Media.net is another slick ad network with premium ad formats that don’t sacrifice user experience, but still generate clicks. That in itself is highly advantageous, but they also assert that they have access to all major buyer networks. That will ensure that not only will the ad formats be effective, but they’ll have access to high paying, premium CPC rate advertisers.
Amazon Associates CPM Ads
Remember that we talked about including CPM (Cost Per Impression) into your ad mix to optimizing your revenue take? This strategy can create the margins you need for your arbitrage strategy to be successful. When you think of Amazon Associates, you tend to think about their affiliate program where you promote the products available on their site for commission.
But Amazon also introduced a CPM option. The great thing about Amazon ads is that they tend to be less interruptive to the user experience. It’s such a large and popular ecommerce brand, it won’t come across as spammy as is sometimes the case with other ad formats.
The catch here is that your content needs to be relevant for these advertisers.
And one new network to watch in 2016 who’s actually not new at all
Unsurprisingly, Google is taking a stab at this native advertising thing the kids are all talking about. And when a big whig like Google throws its hat into the native ads ring, we pay attention.
We’ve started to see more and more arbitrage websites using Google native ads on their websites. It’s still unclear how successful it is for them but since most arbitragers are quick to act if a network doesn’t produce the margins they’re looking for then we can guess it’s doing well.
Here’s how you get Google native ads:
• Use DFP.
• Click Delivery tab.
• In the left nav, click Creatives, and then Native ad formats under Creatives.
• Near the top of the screen, click New native ad format.
• (Optional) Click Import to import the variables from a native ad format you exported previously.
• Enter an internal name and description for the new native ad format.
This is the name that will appear as an option when selecting a native ad format for a new creative.
• Click New variable to add a new variable to the native ad format.
Select the variable type. This indicates the type of value a trafficker can enter:
• File: Must click the Choose file button and upload a file.
• List: Must enter an enum.
• Text: Must enter a string.
• Number: Must enter an integer.
• URL: Must enter a URL.
• Enter the settings for your variable
• Click Done.
• Repeat steps 6 through 9 to add more variables.
• In the list of variables, you can click the up and down arrows to change the variable order.
• Near the bottom of the screen, you can click Preview form to see the form traffickers will fill out when they add a creative based on this native ad format.
• Click Save.
It’s all about the traffic in, traffic out equation
So we gave you suggestions on ad networks to both buy your cheaper CPC traffic, and to monetize the traffic when it arrives. That’s the traffic in, traffic out equation we’ve been talking about.
As we noted, the basics of arbitrage is straightforward. You optimize by getting lower cost traffic coming in that generates you optimal ad revenue once it arrives. If you can create margins of profitability, then it’s a clear path forward:
You simply scale up your traffic buying… so that you can scale up your total net ad revenues earned.
But you have to ensure the equation is working before you scale up. And, as always, we won’t miss the opportunity to tell you how that’s determined.
It’s a measure of testing and experimentation.
We know these are good networks. What we don’t know is the precise mix of incoming traffic and monetized ads on your site that will generate the optimum net revenue for you. Get testing.
So are you ready to start testing an arbitrage strategy for your site?
Content creator, expert on everything you can Google.