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Traffic arbitration

Nikiforov Alexander
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What is traffic arbitrage?

Traffic arbitrage is the process of acquiring internet traffic at a low cost or even for free, followed by reselling it at a higher price. It is a form of affiliate marketing that can be divided into referral and affiliate. It is important to note that arbitrage specifically refers to affiliate marketing, where arbitrageurs earn money on the difference between customer acquisition costs and generated revenue.

Traffic arbitrage scheme

The mechanism of arbitrage is quite simple: advertisers offer internet users incentives to attract customers to them, paying rewards for successful actions. For example, the affiliate program "Pumpadu" pays 1200 rubles for each new client who purchases a mandatory insurance policy. Participants in such programs, known as arbitrageurs, can earn money not only for ready buyers but also for clicks, registrations, and other actions.

Various promotion methods are used to attract traffic, the most popular of which is paid advertising. The arbitrageur invests their funds in advertising, and their income is determined by the difference between the costs of customer acquisition and the payments from advertisers. For example, if acquiring one customer costs 300 rubles, and the advertiser paid 1000 rubles, the profit for the arbitrageur will be 700 rubles.

Types of traffic arbitrage

There are several types of traffic arbitrage that differ in ways of attracting users:

  • Paid traffic: The most common type, which includes targeted, contextual, banner, and teaser advertising placed in messengers, applications, and on bloggers' pages.
  • Free traffic: This type is less popular and is suitable for those who already have a permanent audience on their website, social media, or through email newsletters. Referral links are placed in articles or on banners, allowing bloggers to monetize their content independently.

Arbitrage by type of advertising

  • “White” arbitrage: Uses ethical and allowed methods of promotion, such as advertising regular goods and services.
  • “Black” arbitrage: Advertises prohibited goods using illegal methods, which can harm the business's reputation.
  • “Gray” arbitrage: Applies dubious but not prohibited methods, such as clickbaits and partial information concealment.

Advertising methods in arbitrage

Arbitrageurs use various advertising methods to attract traffic:

  • CPA (cost per action): Payment is made for a specific user action, such as registration or purchase.
  • CPC (cost per click): Payments are made for each click on the advertisement, regardless of the user's further actions.
  • CPT (cost per time): Payment is recorded for the time the advertisement is displayed.
  • CPM (cost per mile): Advertisers pay for every thousand impressions of the advertisement.

Payment models in arbitrage

Each of the models has its own characteristics:

  • CPA: Payment for specific actions, such as app installation or product purchase.
  • CPC: Payment for clicks, allowing arbitrageurs to quickly attract user attention.
  • CPT: Payment for time, suitable for website owners with traffic.
  • CPM: Payment for impressions, requiring extensive investments to achieve good profit.

Thus, traffic arbitrage is an effective tool for generating income; however, it requires a careful approach and awareness of the potential risks associated with the choice of advertising methods and partners.