A quickie explanation, a Google arbitrage is the practice where a user clicks on a Google Ad only to get sent to a site with yet more Google ads. If you’ve browsed the Web, I’m sure you’ve seen these types of sites. The financial model works like this, the publisher of the site would spend say, $1,000 a day on AdWords to get visitors to his site and then see $1,400 in clicks from AdSense ads on his site. So the publisher would net $400. Do this with enough sites, and not only do you make crud on the Web, but you’d pull in some income.
I work with Google AdWords and I’m not surprised (in fact it’s a little late it seems) that this is going down. You see, the arbitrage sites hurt Google’s content network, so much so that advertisers have been pulling ads from it. (High CTR with low conversions.) In the past few months, Google has been reaching out to advertisers, calling and emailing, telling them what a wonderful deal their content network is.
Perhaps after these sites are banned the content network will be worth purposefully advertising on.
[tags]Google, Google AdWords, Google AdSense, arbitrage sites, the crusty parts of the Internet [/tags]