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Recently I have been very attune to keyword arbitrage and the sites who promote this practice. There is certainly a lot of money to be made in this field with so many unsuspecting advertisers who choose to work with second tier advertising networks. What they do not realize is the traffic from these networks are very poor and can easily inflate their PPC campaigns when mismanaged.

Keyword arbitrage involves bidding on hundreds of thousands of keywords at a cheap price on search engines and driving that traffic to landing pages where unsuspecting users click on an ad disguised as a link with long string parameters. Even by bidding on penny terms, a site based on pure keyword arbitrage can make in excess on one thousand dollars net profit after all expenses in one day. Some groups and firms have this down to a science and manage their arbitrage campaigns extremely well. They even manage to get the coveted direct XML feeds normally reserved for the biggest and best of advertisers delivering over millions of ad impressions.

One downside when putting all your internet properties into an arbitrage scheme is that advertising networks can work to eliminate such practices any time, and your income stream can be ended tomorrow. It is a matter of risk and reward. For example, if your team manages to buy over one hundred thousand dollars worth of traffic to generate two hundred thousand, the search engines still might suspend your account and your team ends up losing one hundred thousand because the delay in payment is usually over two months. Currently the rewards are pure profit.

As a directory owner, you may want to be well aware of these website entry submissions also. In due time, Google and other search engines may start banning these arbitrage sites and as a result may drag down your directory for listing them.

Advertisers who do not want to get caught in between this keyword arbitrage game should turn off their ads for the search networks, and content networks while displaying the ads only on primary search engines such as Google, Yahoo and MSN. Since the arbitrage websites tend to deliver very low quality traffic that do not convert upon your call of action, why pay for it?