Online Advertising Arbitrage
Online search advertising arbitrage has been there since web’s existence. In short, publisher advertises on search engines to drive traffic through PPC and also hosts ads on a web site or blog from Yahoo Publisher Network or Google’s AdSense program and the price difference is the real prize.
Now that’s a simple example of small time publishers who indulge themselves into the price arbitration game and benefit a lot. Now what about big publishers? Though till now, we didn’t have the data but today Alley Insider reported something which is quite interesting.
Yahoo placed 102,742 ads against Google search results during April and spent, on average, $90,965 per day doing it. The average ad Yahoo buys on Google appears 15th from the top, often on the second page of results. That means Yahoo isn’t paying very much per click. The idea is that a Google user will click on the Yahoo ad, and then, once they reach the Yahoo Shopping search results, click on a higher-placed, pricier ad.
Now that puts a big question mark if its a good or bad practice. And it has been quite a debate from quite sometime now. Infact, you might have seen that yourselves too many a times.
Infact, most of the content publishers do it. For example, second-tier search engines, shopping engines, directories and Internet Yellow Pages are engaging in high-level of arbitration.
Though its quite a strange practice but quite common too. Infact, it won’t be surprising to note that Google itself does it. Amazon being No.1 in terms of playing the arbitration game and Google being at 29th slot with 24% jump in M-0-M.
It’s so true that, business owners and marketing agencies see arbitrage as a detrimental practice, while those profiting as ad publishers and affiliates like the opportunity arbitrage presents. Time will tell what consumers think. Their response will certainly shape the search arbitrage space.
Search Interactive Marketing Blog
June 12th, 2009 at
Online advertising is receiving a lot of bad press lately about its effectiveness. The reality is the number of places to advertise has increased dramatically in the last 24 months. Giving a supply-demand ratio, it is only normal the competitiveness has driven ad costs down. This will only be followed by an increase in online advertising useage. This will drive the demand back up.
Marketing is not what generates a sale or closes the sale. Marketing in any business is to attract a potential customer.
July 28th, 2009 at
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January 1st, 2010 at
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