What is traffic arbitrage

What is traffic arbitrage

More and more money is being made online and businesses are willing to allocate huge budgets to attract visitors to their online resources, products, and services. This has led to the emergence of a category of people who get paid for attracting visitors to websites and selling online. In this article, you will learn about the concept of traffic arbitrage in simple terms and how to start earning online by doing arbitrage.

The essence of traffic arbitrage online

Let’s start by defining what online traffic arbitrage is and why it is important for businesses. Traffic arbitrage is a type of affiliate marketing, where a traffic management specialist attracts customers for their affiliate or sells products of that affiliate, receiving a percentage of the sale or a fixed fee as a reward. The people involved in attracting traffic are called arbitrageurs. The goal is usually to increase the number of direct sales.

Arbitrageurs may also solicit subscribers or collect personal information from the target audience, such as email addresses and phone numbers. With the use of affiliate programs, a business can significantly expand its advertising reach and pay only for successful conversions, bypassing the costs of its marketing division.

How traffic arbitrage works

The basic idea of arbitrage is to attract traffic for the advertiser. The advertiser creates his affiliate program or places an offer in a CPA network. The offer specifies the conditions of the task, such as attracting traffic from certain sources, the use of attraction methods, restrictions in the use of visual elements, slogans, and other details.

Webmasters, Influencers, and arbitrageurs choose the offer that matches their interests. Their task is to attract the cheapest possible traffic for the advertiser:

  • Webmasters place ads on their websites or create articles that direct their readers to the offer.
  • Influencers create content for their subscribers where they recommend the advertiser’s products or embed ads in their content.
  • Arbitrageurs buy traffic through ad networks or use opportunistic sources.

Let’s look at an example: Company N wants to sell its weight loss cream. For each sale of the cream, the company is willing to pay $5. The arbitrageur creates several different ads with a small budget to evaluate the profitability of this offer. Some of the ads attract an audience with an average conversion cost of $2, while the rest of the ads are less effective. In such a case, the arbitrageur disables all other ads and directs the entire ad campaign to promote these successful ads to the target audience. The cost per conversion can vary depending on the optimization and learning algorithms of the ad network while increasing the reach.

There are many sources of traffic, and experienced arbitrageurs strive to master different ones to increase their profits and competitiveness.

It is important to note that when working with arbitrage there are often situations when an advertiser or CPA-network disputes the quality of the brought traffic to avoid payments. Therefore, choosing proven affiliate networks and grids with a good reputation among other arbitrageurs plays an important role.

Types of arbitrage:

Arbitrage covers a variety of products, but some of them face significant legal restrictions in advertising. For this reason, arbitrage can be categorized into the following types:

White arbitrage: standard goods such as games, clothing, banking products, and many others are promoted in this category. They can be easily promoted using contextual advertising, targeted advertising, SEO optimization of websites, and by promoting through YouTube, TikTok, and social media.

Black arbitrage: this type specializes in advertising casinos, betting, weight loss products, adult resources, and other similar products. To promote black arbitrage offers, you have to turn to “adult” advertising networks or use cloaking services.

Cloaking is a set of methods that helps to hide the real content of the advertisement from the verification algorithms of advertising networks.

For convenience, products and services in arbitrage are often separated into verticals. For example, casino advertising is called gambling, dietary supplements are called Nutra, drugs are called pharma, and so on. Each vertical has its characteristics. For example, in dropshipping, which is a type of white arbitrage, SEO promotion, targeted advertising, and Instagram accounts are actively used. And in gambling, the audience is most often attracted through mobile applications or TikTok.

Mobile arbitrage, which is characterized by the specifics of working with mobile ads, should be singled out separately. Mobile traffic arbitrage is focused on getting conversions from mobile devices, such as pop-up notifications, in-app videos, and banners. A special feature of mobile ads is that ad views are often incentivized by in-game rewards.

What are the earning opportunities in arbitrage?

There are no fixed earnings targets in arbitrage, but beginners need to learn how to make at least a small profit. Even conditionally free traffic sources can bring a stable passive income with minimal time and financial expenses.

Experienced arbitrageurs can earn from 1000 dollars a month and more. The size of earnings depends not only on the ability to customize advertising and create creative ads but also on the budget. Usually, CPA networks and companies make payments after a test period to check the quality of traffic and make sure that the orders are authentic. The arbitrageur must have sufficient funds to continue the advertising campaign and live until the payouts are made.

Some verticals require more skills and knowledge and can be difficult to tackle alone, so experts from different fields often team up.

How to start a career as an arbitrageur

To become an arbitrageur, you will only need one thing – having the desire. You can start directing traffic from available free sources, which will allow you to accumulate initial capital to build an advertising budget and try out methods such as targeted, contextual, or mobile advertising. Your experience will consist of trial and error, with you having to search for information and experiment with your means.

To reduce the number of mistakes, you can turn to ready-made arbitrage courses where you will learn the basics of SEO optimization, targeting, and other aspects of advertising. By investing in training, you are more likely to get up-to-date knowledge and can start earning profits right from the beginning of your career. You can then supplement your knowledge with other courses that will give you a more in-depth look at certain aspects of the field.

In the process of training, you will usually prepare a portfolio and master the most modern sources of traffic. When choosing training courses, it is better to stop at proven options with many positive reviews.

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