There are many ways to profit from internet traffic, however this post will largely focus on profiting from other people’s internet traffic. What’s better than making a profit from the work of others? I trust that most readers are familiar with domain parking and it has therefore not been discussed in this article. I’ll write a future post on domain parking for those new to domaining. 

AdSense Arbitrage

For starters, despite what Google may like to have you believe, AdSense Arbitrage is still alive, profitable, and also liable to get your AdSense account disabled, so use this at your own risk if you have websites which depend on AdSense as a revenue source. If you depend on AdSense revenue, it might be wise to incorporate a separate business for your arbitraging and have the account registered to someone other than yourself — preferably with a different IP address to protect your main AdSense account. The concept of Adsense arbitrage is simple — you buy cheap traffic and convert the traffic into expensive clicks which more than cover your costs in acquiring the traffic necessary to create these clicks.

As an example, suppose I was monetizing this blog through AdSense. I could for example acquire very cheap clicks through Google Adwords for the keyword “LLLL.com” because there’s little competition for the keyword and send the traffic to a page I’ve optimized to show AdSense advertisements related to “domain parking”. Because there’s no competition (at least at the time of this writing) for “LLLL.com”, I’ll be able to acquire traffic for very cheap, yet LLLL.com is a very descriptive term used to my knowledge only in the domain industry, meaning the clicks I purchase will result in highly targeted traffic which would need only a very small conversion rate for me to profit. Domainers aren’t known to often click on AdSense ads, however I think giving a domaining example has made it this a bit easier to understand.

Converting Traffic

If I’m paying 5 cents per click and have a 3% conversion rate (that is, 3% of people clicking on a domain parking AdSense ad on my site) then it’s costing me $0.05/0.03 = $1.67 per click. If the average click yields more than $1.67, I’m making a profit. What’s important to remember when deciding what to pay for clicks is what you expect the desired action to yield and the likelihood of that action occurring. While extremely low bids won’t normally yield maximum profit, they will minimize losses if you’ve overestimated the value of the desired action or the likelihood of it occurring. You can always increase bids later.

When writing ads for Adwords, it’s important to consider the fact that Google uses Smart Pricing. This means that intentionally writing your ad to discourage anyone unlikely to convert could end up driving up your required bid substantially — I’ve had $12.00 minimum required bids on keywords I had a max bid of less than $1.00 on in the past because I tried to discourage untargeted visitors from clicking too aggressively — it would have been better to have gotten a few of them visiting at $0.10-$1.00 per click. At the same time, making your ad too inviting or targeting keywords too broad could become enormously expensive and unprofitable (eg. advertising this blog on Adwords for ”domain names”).

When I refer to AdSense arbitrage in this article, I’m referring to purchased traffic sent to Made For Adsense minisites which were designed to profit from the discrepancy between what it costs to acquire traffic and what that traffic can be monetized for. While Google frowns upon purchasing Adwords ads solely to redirect them to Made For AdSense minisites, it’s perfectly acceptable to purchase Adwords ads for a developed website which runs AdSense as a monetization method. Developed websites usually have a much lower click-through rate than Made For Adsense minisites, so you’ll need a lower cost per click to break-even.

AdSense arbitrage isn’t much different from many other types of traffic monetization. As an example, Amazon.com’s Kindle eBook reader costs $299 and Amazon offers  10% ($29.90) on any Kindle sales you send them. Affiliate programs often pay far more per conversion than you’ll ever make getting a visitor to click an AdSense ad, however they’re also much harder achieve — it’s much easier to convince a visitor to click an ad to view the Amazon Kindle eBook reader than it is to get that visitor to make a $299 purchase.

Pay Per Click or Pay Per Action ?

It doesn’t matter whether you’re monetizing parked domains or websites, this question will inevitably arise. Both domain parking and website monetization are still very much an inexact science — trial and error is often the best way to go about finding an ideal way to monetize your traffic and/or traffic you’ve purchased. Monetizing traffic through pay per click advertising tends to be a much more stable income source than monetizing traffic through a pay per action model. Call to action domains usually perform best under a well-chosen pay per action affiliate program.

Social Media Traffic Monetization

I rarely use Twitter, yet I get 1000+ uniques to this blog each month from Twitter and a couple Twitter-related websites from using TwitterFeed which automatically shares links to my blog posts with Twitter followers. I can only imagine how many users Twitter would send my way if I used it much more frequently… Twitter isn’t alone in this regard of course — Facebook, Myspace, Digg, etc can all help increase traffic to your websites. You can even look into arbitrage.

Conclusion

This article discussed how traffic can be monetized through pay per click and pay per action ad campaigns, along with an explanation of what arbitrage is and how it can be done. While I discussed Adsense arbitrage in this article, this can of course be done with any search engine or other website. I shied away from suggesting any particular pay per action program, mainly because experiences will vary based on your domain, content, and visitors. The best way to find pay per action programs that will likely work well for you would be to look at what popular websites in your niche are using. In many niches, popular websites will perform best with flat monthly rate advertising or cost per thousand impressions advertising.

Purchasing traffic and redirecting it to a parked domain is not allowed at most domain parking companies. Some domain parking companies do not let parked domains be promoted in any way, including through hyperlinks. Clicking on ads or paying people (or asking friends/family) to click advertisements on your parked domains or developed websites is click fraud and is taken very seriously. Under no circumstances should you ever sell a domain parking account or other traffic monetization account.

Related posts:

1. Selling Domain Parking Accounts
2. Click Fraud Report
3. Twitter 101