Traffic arbitrage is a complex subject. Perhaps, you wanted to try your hand at this method of making money, but you don’t know where to start. We are launching a whole new series of articles on traffic arbitrage, and we’ll start at the very beginning to explain what traffic arbitrage is, how much you can earn on it and how much you’ll need to invest first.
What is traffic arbitrage
Traffic arbitrage implies buying and selling the website visitor flow. In order to start, you’ll need to purchase traffic on one resource and up-sell it to another one. Types of resources include context advertising, social media advertising and more.
It’s time to take a look at some key terms that we’ll use later on.
- Advertiser: A supplier of goods or services.
- Offer: A specific proposal from an advertiser. For example,a last minute tour.
- Traffic source: It might be social media, mailing, context advertising — basically, any resource which drives traffic to the advertiser’s website.
- Pre-landing page: A mediator website between an advertisement and the landing page with the advertiser’s offer. A pre-landing page usually contains a sales message to stimulate the public’s interest in your product. For instance, if you aim at having people install your apps from the App Store and Google Play, a pre-landing page will be perfect for showcasing a review on your app describing all its advantages and directing visitors to the landing page to proceed with the installation of the app. A pre-landing page is often needed to pass the moderation in case of dubious advertising. A moderator may decline a direct link to the landing page. But, if this link leads to a mediator website, it increases the odds of getting approval from a moderator, because a pre-landing page doesn’t sell any goods. This increases the odds of getting the moderator’s approval for the link, because your pre-landing page doesn’t sell anything.
- Creative content: Advertising material. For example, a picture and a sales message.
- A combination: A connection between an offer, the traffic source and creative content. Each combination should be tested upon the launch, and its performance is to be analyzed constantly, because the advertised product or service might become irrelevant, and you’ll end up wasting money on a useless combination.
- Affiliate network: A mediator between an advertiser and traffic arbitrage experts. They are responsible for solving all the organizational matters with advertisers, so traffic arbitrage experts are able to cooperate with dozens of stores and websites, see the sales statistics, and withdraw all the funds at once, and all in a single interface.
How can you earn on traffic arbitrage
Let’s have a look at the ways of making money on traffic arbitrage:
- CPC (Cost Per Click) is a model in which an advertiser pays a publisher when the ad is clicked.
- CPA (Cost Per Action) is a model where the advertiser pays for a specified acquisition, for example, when a user watches or buys a video.
- CPI (Cost Per Install) implies that the advertiser is charged a fee only when the application is installed.
- CPL (Cost Per Lead) is a model where the advertiser pays for an explicit sign-up from a consumer interested in the advertiser’s offer.
How to earn using the CPA model
Let’s imagine that you want to make money on sports nutrition. To do so, you paid 15 euro for the context advertising and put a link to the advertiser’s website or a pre-landing page.
This advertisement brought 4,000 visitors to the online store, 200 of which made a purchase, so then the store payed you 30 euro.
- 15/200 = 0.075 euro — the sum that you spent on every buyer, or 0.00375 euro for every visitor.
- 30/200 = 0.15 euro — is your income on every buyer.
- 0.075 is the net profit on every buyer.
How to earn using the CPC model
Let’s suppose you have your own website to place an advertisement on, and you use Google AdSense for this purpose. The traffic comes from Facebook, for example, and as a result, you drive the traffic from Facebook to AdSense, earning everytime the ad on the website is clicked.
How much you can earn on traffic arbitrage
The income on arbitrage depends on many factors, and it is often unstable. One successful combination can bring you thousands of dollars in one month, but you’ll still spend a few thousands of dollars searching for it.
If you don’t work towards quick improvements, it’s possible to make a few combinations without spending a lot of money. There is an inspiring example of how to make $1 million a year from display ads. Just imagine the income you can earn if you combine these various marketing strategies.
The skills needed to earn on traffic arbitrage
We collected six important skills to start earning on traffic arbitrage.
- Analytical abilities
You’ll have to do a lot more than just choosing an offer, selecting the traffic source, creating content, and launching the advertising campaign. The most important thing is to analyze campaigns that have previously been launched. Then, continue working on successful campaigns and shut down the others.
If you feel that meticulous analysis is not your thing, maybe traffic arbitrage isn’t either. Otherwise, you risk losing a lot of money and getting disappointed with your performance in this field of expertise.
- Diligence and thoughtfulness
This paragraph complements the previous one. You’ll need to pay attention to every detail which might have an impact on the success of the campaign. For example, it might be important to find browsers that bring more clicks on a specific advertising campaign.
- Ability to identify your target audience
You need to understand who your target audience is, and develop the creative content and pre-landing page accordingly.
- Ability to trust the intuition
You might say it’s mystical, but intuition actually comes from experience. Sometimes, our brain converts knowledge into a vague feeling that a combination might fail, or that a product will bring successful sales in the next few months. At times, it’s better to trust your gut and try a new option out. It could fail you, or it could help you earn millions.
- Sharp mind and discretion
Sometimes, an advertising campaign may inspire you to spend a great deal of money on it. At these moments, you need to pause, relax and remember that it’s sometimes better to take small steps in order to reach a stable income, rather than funnelling all your money into an idea that might have attracted your attention for a moment.
Running traffic arbitrage might require a significant investment, which is fine, as long as you are 100% sure about its positive outcome. It’s important to think it through beforehand.
- Creativity and flexibility
You’ll have to come up with new ideas and advertising campaigns. And on top of that, you’ll to have a half step your competitors. The faster you catch the trend, the more chances you’ll have to make money on it.
Getting started on traffic arbitrage
- You should read through a lot of information on traffic arbitrage and learn about traffic types, income models, advertisers and offers. It’s also important to embark on the technical side of the question, for example, get an understanding of how CPA trackers work.
- Sign up on the affiliate network. If you already have an account with Travelpayouts, you can try earning on traffic in cooperation with our advertisers.
- Choose advertisers and offers.
- Choose advertising tools.
- Make creative content for each offer.
- Build a few combinations.
- Try to launch different combinations and then analyze the results.
How much money it takes to start earning on traffic arbitrage
You can start with $50-$100 just to understand how it works. However, for a newbie without any related experience, it will be hard to get your first working combination.
Experts believe that, in the beginning, you should be prepared to spend between $500 to $1,000 and without any outcomes. If you have analytical skills, you’ll be able to test a few combinations, understand what works for you, and then spend money more carefully.
6 tips on how to start earning on traffic arbitrage
- Be ready to spend a lot of money at first. It is fine.
- Be ready for mistakes. It is crucial to gain personal experience to succeed in traffic arbitrage. Even if you worked through a lot of information and training, mistakes are inevitable.
- Forums and chats might be extremely helpful, as they can give you insight on ways to find advertisers and offers to choose in the very beginning. And you can ask for advice and see what works best for you.
- Analyze the information you received and write down all the interim findings to have an opportunity to read and think them through later.
- Pay attention to the rules of your affiliate networks, advertisers and offers. Sometimes a campaign will fail because of negligence.
- Stay updated on the situation, communicate with other newbies as well as more seasoned colleagues so you don’t lose touch with the situation and learn from the experience of others.
Traffic arbitrage can earn income, but it won’t be a quick buck. This activity requires hard work every day. You’ll need to always be looking for new ideas and analyze what brings you success and what may let you down. In the following articles, we will talk about the best trackers for traffic arbitrage and ways to find combinations that will work best for you.