Basics · also called display arbitrage, content arbitrage
Ad arbitrage
Ad arbitrage is buying visitors with cheap ads and earning more from the ads those visitors see or click on your own pages.
Ad arbitrage means paying for an ad in one place to earn from ads in another. A publisher buys low-cost clicks, lands the visitors on its own site and makes money from the advertising shown there. If the ad income per visitor beats the cost per visitor, the difference is profit.
People often use the term for the display version: a visitor arrives from a native or social ad and scrolls through a long article or slideshow packed with banner ads, each impression earning a little. The income there is measured in RPM. Search arbitrage is the search version, where the income comes from a click on a sponsored listing and is measured in RPC.
The display version has attracted heavy criticism from advertisers, who call the worst sites Made-for-arbitrage because the page exists only to show ads. Search arbitrage faces a similar test: the page must give the visitor something useful, and the visitor must genuinely want what the advertiser sells.
An example
For example, a site pays $0.05 per visitor from a native widget. Each visitor views 12 pages with ads worth a combined $0.08. The site keeps $0.03 per visitor, or $300 on 10,000 visitors.
Related terms
Traffic arbitrage
Traffic arbitrage is paying to bring visitors to a web page and earning more from those visitors, through ads or sales, than it cost to bring them.
Search arbitrage
Search arbitrage is buying visitors cheaply from one ad platform and sending them to a page of search ads that pays more per visitor than they cost.
Made-for-arbitrage (MFA)
Made-for-arbitrage describes a site or page built mainly to turn bought visitors into ad clicks, with content that exists only to carry the ads.
RPM (revenue per mille)
RPM is revenue earned per thousand units, usually page views, sessions or ad impressions: revenue divided by the count, multiplied by 1,000.
Native advertising
Native advertising is paid promotion designed to look like the editorial content around it, typically a headline and thumbnail shown beneath or beside articles on news sites.