AdSense Arbitrage is Dead?

It appears from a series of posts in the forum at WebmasterWorld indicates that Google could finally be cracking down on AdSense arbitrage. Some owners of AdSense accounts involved in arbitrage claim to have received emails from Google advising them that they have an unsuitable business model for AdSense and that their accounts will be disabled within a few weeks.

In essence AdSense arbitrage involves bidding for advertising on Google AdWords at very low "per click" prices, then directing that traffic to a site designed with the primary purpose of having the visitors click on similar advertisements but hopefully those a much higher bid price, sourced through Google's AdSense contextual advertising program.

It can be argued that the key to successful arbitrage is to not provide any substantial or quality content on the landing web page. This means that when a visitor comes they are more likely to want to leave immediately and click on one of the AdSense ads to make a quick exit.

Jennifer Slegg, who keeps a blog on contextual advertising at JenSense.com, sheds some light on the reason for this latest action. “From a business perspective, it does make perfect sense for Google to make this move, since so many Google AdWords advertisers refuse to advertise on the content network because there are so many “Made for AdSense” style sites as well as those doing arbitrage. So in the long run, it could mean more money for publishers if/as advertisers return to the content network.”

So just how widespread is arbitrage? We're not just talking about a few dollars here. I did a quick search on “AdSense arbitrage” yesterday (yes, at Google's very own search engine), and there at the top of the results is a product being promoted with the bold claim, “How I Use Google Adwords to Drive Traffic to My Adsense Sites Making Me $1,324.79 a Day on AutoPilot.” That's big dollars.

And over at WebmasterWorld this week, one forum member joined the discussion about the account closures with this comment, “Got the same email here. I just reached my 70k-month... That sucks.”

Jeremy Luebke of Marketingpilgrim.com had this to say, “This move is long overdue. The quality of the traffic coming from the Adwords content network has been terrible for years. There is not a single campaign any of my clients run on the content network where they are willing to bid more than the minimum bid. I'm sure by doing this, Google is hoping to restore confidence on both the advertisers end and the end user.”

This has all happened during May of 2007, so if you are reading this some time later you should catch any latest developments on the sites mentioned above.

What does this mean for web site owners and other advertisers? For webmasters using arbitrage or other dubious techniques this is a wake up call. In the long term quality will be rewarded and the rubbish will be thrown out.

I think these webmasters had to know this change had to come one day. As one forum user known as “potentialgeek” wrote, “For those who've been making money off arbit, if you're honest with yourselves, you must have known you built your business on sand, and guessed this time of hard rains would eventually come and wash it all away”.

For advertisers, Google's AdWords and AdSense programs just took a big leap forward in terms of quality. I am excited to see what difference this makes.

No doubt there are many webmasters looking for a new strategy right now. Let's hope they have learned a lesson and develop some new strategies based on good techniques and quality content.

Instead of using advertising for AdSense arbitrage perhaps these webmasters could use their advertising expertise to direct traffic to sites that contain real content that is of value to visitors. And how could they make money doing that? Well, the old-fashioned way of course. They could actually sell one of their own products or services. And if they really have nothing of their own of value to sell, perhaps they could recommend good quality affiliate products.

It's another day, another development, in the online business world. I think it's been a good day for all concerned. It's been a good day for the quality of Google's advertising network. And it's been a good day for the average Joe Citizen, who will not be taken to so many trashy web sites whenever they click on an advertisement.