Is it Arbitrage?

[healingsites]

Some uber-affiliates are beginning to promote their CPA/affiliate techniques as a form of arbitrage. These guys spend upwards of $100K a day on PPC ads to direct traffic to CPA offers. I caught some flack one of the marketing threads for describing this process as "arbitrage."

It seems to me to be very similar to what people were doing last year with Parked.com. What do people here think? Is this stretching the definition of arbitrage too far?

 

[enlytend]

"Beginning to"????? Nothing new - affiliates have been promoting offers via paid search for a long, long time.

Technically (if they're going direct to the offer) it's arbitrage, but there's a world of difference between sending paid traffic to a merchant page (or thin landing page on your own website) where the advertiser gets paid per action (signup, sale, etc.) and sending it to a parked domain (or MFA/PPC page). For one thing, you need to send much higher-quality traffic if you hope to make a profit. This benefits the merchant and the advertiser - a conversion for the advertiser is a conversion (or at least a qualified lead) for the merchant.

When the revenue is PPC (like parked domains) any traffic, even poor quality traffic, will probably have SOME positive ctr, but poor quality traffic won't convert for the merchant (the one whose budget is paying you for those clicks). When merchants view domains as a poor source of traffic and a loss of their advertising dollars, they opt out of showing their ads on that network. Over time, parking revenue drops accordingly.