Arbitrage is the processing of buying and then reselling an asset through a different market in order to net a profit. Though the term most frequently comes up in the context of stock exchanges, it’s also applicable to the world of digital ads. In fact, many well-known websites utilize this strategy to drive revenues. So how does it work, and what techniques can you use to make it work on your website?
Content/traffic arbitrage is quite simple in theory. A website hosts its own unique content (most commonly as news articles), and then buys traffic on other websites, often in the form of native ads. People start clicking on the native ads and begin visiting the advertiser’s website. Then, the advertiser starts selling its own ad space to net a profit. Simple as that.
But although the concept is easy to grasp, there’s still nuance and skill required when it comes to execution. Here are some key pointers to follow when building out your own arbitrage strategy.
Remember that everything stems from good content. The better your content, the higher your CTR.
If you’re planning to enter the world of online content, you’d better bring your ‘A’ game. You should constantly be asking yourself if your content is compelling enough, and always thinking of interesting new topics to add to your editorial calendar.
When it comes to content ideation, you might find it helpful to see what type of stories are currently performing well on other websites. Most major news sites now have a “trending stories” section that you can reference for ideas. The news feeds on Twitter and other social media platforms can also be a great source of inspiration.
Once you’ve settled on your story topic, the next step will be to decide on the accompanying image and headline. This is important because your thumbnail image and article headline can make all the difference between a user clicking on your link, or completely ignoring it.
Also keep in mind that you need to strike a delicate balance. Your headline/creative should be interesting enough to grab the interest of your audience, but not so outrageous that they devolve into outright clickbait. If you’re buying traffic through native ads, you’ll also need to make sure that your content fits in well with the other articles on the publisher’s website.
When it comes to buying traffic, you want to make sure that your money is well-spent. Take some time to identify the most suitable publishers for your target audience. Learn about their ad placement options and the corresponding CPC rates you should expect to pay. Also, do your own research into the type of content they regularly publish on their sites to make sure that your ads will perform decently.
Native placements tend to perform great for content. This is because native ads are expressly designed to fit in alongside other articles. We recommend finding a native partner that can get you tons of traffic at a low CPC.
Ad platforms like MediaGo let you to buy native traffic on top publishers such as MSN without having to approach the publishers directly. This is a great option for most advertisers, since it simplifies the media buying process and provides access to a team of professionals who will help optimize ad performance and troubleshoot any problems.
Let’s say you’ve already figured out your article content, ad creative/copy, and publishing partners. Now, it’s time to monetize. The key concept is very simple: you need to bring in more money from the ads on your website than the amount you’re spending on traffic. However, this is simpler said than done.
First of all, if you’re still in the process of setting up the available ad placements on your website, you’ll want to think long and hard about the placement locations and formats. These decisions will be directly related to ad performance and revenue – so they shouldn’t be taken lightly.
Secondly, seek out content-appropriate advertisers with good offers. The more fitting the advertiser’s content is for your audience, the better it will perform.
Finally, the CPC rates on both your website and your publisher sites will continually change over time, and will also differ between campaigns. You will need to frequently review performance and make adjustments as necessary. This includes adjustments to your own campaigns, as well as the placements on your website.
We hope you enjoyed this basic intro to the world of content/traffic arbitrage. Remember to check back in on the MediaGo blog for more digital advertising strategy advice.