While searching for ways to reduce the cost of your pay per click advertising, you may have come across the terms “advertising arbitrage.” There are quite a few products based on this concept, including one called “Get Google Ads Free!” which was quite popular about two years ago. Many other products tout that it is possible to get your pay per click ads for “free” by simply “inserting a few lines of code” in your page. But the question remains: is this really possible?

I will get right to the point with the answer: technically, yes. But these methods will not be suitable for most affiliate marketers or even those who have their own products to sell. Why? Aren’t the ads supposed to be free?

Well, they aren’t. You will still be required to pay for your traffic just like anyone else. The whole idea behind the “advertising arbitrage” concept is that you hope to make up the cost of your pay per click campaigns by selling ad space on your website. Claiming that your pay per click ads will be “free” in this case would be the equivalent of saying that you can get a free 8 bedroom house by renting out 7 of the rooms in order to cover your mortgage payment.

This will simply not work if you are actively selling something on your site, whether it’s a product of your own or affiliate offers that you are pushing. The first problem is that by selling ad space on your landing page you will be potentially leaking traffic away to your competition. Advertisers typically buy ad space only on relevant sites. So the only people interested in buying space on yours would usually be those in the same niche. Have you seen an ad banner for Pepsi on the Coca Cola website? What about an ad for Ford on the Honda site? I don’t think so.

To further add to the problem, it will be very hard to sell ad space on your site if it is a relatively new one with limited traffic. If your only source of traffic is pay per click ads, it will also be extremely difficult to sell enough ads to cover your costs.

Now, can this method of “traffic arbitrage” actually work for some people? Yes, it can, but only if the goal of your site is not primarily to sell something. Let’s say you own a discussion forum, a free image host or a free web hosting service. You could sell some ad space on your site (one of the main ways of getting revenue from these kinds of sites) and then buy pay per click traffic in the hopes of getting more members and thus drumming up more recurring visitors to your site. This is, to my knowledge, the only way to make traffic arbitrage work. The only true way to get free pay per click traffic is if you find a promotional offer or get a voucher for X amount of dollars of free ads somewhere.

Setting up a PPC program through a service like Google Adwords is a little tricky. In order to effectively run your ad campaign, you have to do a little keyword research first in order to ensure that you’re spending your money to advertise on the right search terms. Fortunately, there are a number of great tools available that can provide you with all the information you need to make sure you’re spending your advertising money wisely.

The Google Keyword Tool is the first tool you should spend some time with. Start by entering a word or phrase relevant to your website, and your advertising campaign. The keyword tool will show you a list of keywords related to your search, as well as how many searches each term gets in a month. Generally speaking, you want to try and advertise on search terms that get a good amount of attention in a month. If you’re having trouble picking keywords, you can also enter a website into the keyword tool, and it will show you a list of search terms relevant to that website. Try entering one of your competitors into the keyword tool, and see what terms they’re taking advantage of. Make a list of the ten or twenty keywords you feel best represent your site. That may sound like a lot, but don’t worry, you’re going to narrow it down a good bit before you’re done with your research.

Next, pop open Google Trends. If you don’t know where to find it, just search Google for Google Trends, and you’ll find it easily. This tool will show you whether or not a keyword is getting a consistent amount of searches. Some search terms only do well during certain times of year, and as such, those are terms you probably want to avoid. For example, the word “costume”  gets searched heavily around Halloween, but not during the rest of the year. Advertising under costume related keywords at any other point in the year may not be a good idea.  Cross any keywords off your list that don’t get consistent traffic all year long.

Now it’s time to see how much competition you have. Use a tool called Keyword Spy to see how many other people are bidding on the keywords you’re thinking about bidding on. If a keyword is already heavily saturated, you can cross it off of your list.

You should now be left with a handful of keywords that fit your needs. Pick the ones that you feel best represent your site, and set up your ad campaign accordingly. By doing a little research before diving into PPC advertising, you can spend your advertising budget effectively, and boost your traffic greatly.