The Things I Find

Frank Schilling has an interesting post up on Search Engine Arbitrage:

You buy traffic at Google under keyword “hair accessories” and send that traffic to a made up website you created like hairstyling101.com, loaded with staged pseudo content and links to higher paying results at Yahoo. Because the visits from Google are highly targeted and land at pages that look like content (but with well disguised PPC listings), nearly everybody clicks through and the guy running the site simply arbitrages the cost of traffic at Google (plus bandwidth, staff salary and site creation/maintenance) against the amount he will earn from the click at Yahoo. Buy a click for 30 cents and sell it for $1.50. The whole thing happens seamlessly across tens of thousands of keywords; and moves millions and millions of eyeballs from Google over to Yahoo.

While arbitrage has been around forever, I hadn’t thought about using the price differential between buying and selling ads before - I mean, they aren’t exactly a commodity, are they? Yet that’s what Adsense et al turns them into - you’re just selling a block of ad spaces on a given site; Google (or whoever) turn it into actual ads. Search Engine Arbitrage is just leveraging three interesting characteristics of the web:

• The “instant travel” effect - the fact that you can jump from the search engine to the arbitrageur’s site to the end destination in moments;
• The fact that hosting a nearly-unused site can be dirt cheap;
• That unsuccessful pay-per-click ads cost you nothing.

Get traffic that are will respond to two different ads, on two different sites, on the same topic - and you’re in business. I wonder, though - given the rapid convergence of Internet markets - the speed at which pricing information travels between buyers and sellers - how long is it going to last for? Are primary marketers - as opposed to the arbitraguers - just going to start running two- and three- tier pay-per-click campaigns, with different per-click price-points on each tier? Maybe make the branding a little less obvious on the not-so-good ads? Or the same ads, with different keywords/key phrases separating the tiers?