Monday, March 13, 2006

Driving Traffic to Higher Paying Ads - Arbitrage

Arbitrage is one of those words that doesn't come up in the context of a normal conversation. "Normal" defined as English spoken by 90% of us during a 24 hour period.

So, you may not know what it means.

When I bring it up in a session, I see many puzzled faces. It's one of those words you cannot figure out by tearing it apart. But it's a noun and means: The purchase of securities on one market for immediate resale on another market in order to profit from a price discrepancy.

And that's what I teach here.

Basically, buy on Google AdWords, trade with higher paying ads.

But it can get even more exciting.

Yes, it is a fact that you cannot get top ranking for the keyword "mortgage" - unless you have been working super hard since our last lesson. But, that doesn't mean that you cannot benefit from the higher paying ads.

Here's a super-basic example of how this can work:

1. Buy low-cost keywords and create ads for them on Google AdWords.
2. Drive that traffic to a website that is about those ads and keywords.
3. Work enough high paying keyword related content into your site to trigger higher paying ads to show.

Want examples?

High paying keyword: mortgage
AdWords keyword: house painting
Website: All About House Painting

Withing the website, you have ample room to mention how sprucing up the house may be for home selling - and that you may be in the market for a home loan, or refinance, or even a brand new mortgage. Painting the house may influence the final appraisal price the appraiser gives your home - for your refinancing mortgage (but probably not - the key here is "may"...)

Since we are dealing with contextual advertising, the ads displayed WILL change based on the context. Follow these rules:

Context in H1 (or any headline tag), bold, linked, or close to, will influence what is displayed in the Ad Block. Remember that it takes at least a few hours for the ad block to change contextually.

So you acquired the traffic with house painting:

www.servicemagic.com
(Advertiser's Max Bid: $0.73)

That's the top bid today.

However, the bid for mortgage is:

www.capitalonehomeloans.com
(Advertiser's Max Bid: $8.00)

Sweet.

Is it that easy? No. You have to convert the "home painting" clicks to another click on your landing site. Some words convert better than others, some AdWords ads convert better, some pages convert better. You must be vigilant in testing and journaling what is working.

But, as I said, that's the basic idea.

Hope you have followed my methodology from the start so you can incorporate this idea.

2 comments:

Peter said...

What happens when someone click on you ad, is taken to the site, is not converted (didn't click on any ad). If enough people do this, you are out of money.

Natural Remedies

Dave Jackson said...

Thanks for the question, BlogSmith.

In my ebook I go over this situation. As I said, you need to stay on top of your data. Since contextual ad programs are continuously updated throughout the day, it's easy to see if you have a loser.

AdWord click cost v.s. percentage of click throughs. Your gain must be more than the amount spent on AdWord clicks, or you're right - you'll be outta money in a jiffy.

In the ebook, I explain how to set thresholds where you stop the campaign.

Bottom line, be on top of your spend at all times.