Search Arbitrage or Search Marketing is one of the oldest Arbitrage models in the internet marketing industry, but it was in very low volume until 2008, in 2008 Google shut down the search arbitrage traffic for a few months, but within a few months they noticed a significant amount of Revenue drop in whole advertisement ecosystem.
Yes, You have heard it right!
After this test, they brought it back and started to play a vital role in this industry by creating competition in the market. Now the question is how?
Since they are individual search engines, I am talking about google, yahoo, Bing, Yandex, these types of companies, and they have almost all the data from every single person accessing the internet everyday,
Even though they have all the data but they can’t just sell it directly to someone, there are certain regulations in most of the European countries along with USA, Canada & Australia.
For this reason, They partnered with many Big Companies or Consortium like System1, SEDO, Tonic, HelpWire, ASK, Code Fuel, Media.net & few more companies, who have big funds and can ensure a certain amount of delivery every day, Now I am talking about 1M or 5M click out a day, Meaning its really a big challenge to accumulate all this data at a time.
Partnering with all these companies – Google, Yahoo, and other search engines created a competitive environment in the advertisement ecosystem.
This is helping advertisers to get a more targeted audience for their ads and at the same time, Publishers are getting more revenues for their site’s traffic.
Now let’s get back to the search Engine Partners. As a newbie or as a CEO of a startup company, surely you will not gonna intend to jump on this search marketing business with a $100K ad budget a day, and since you don’t have this amount of funds or even though you have it but due to lack of experience you can’t just invest them all.
For this reason, you can’t be a direct partner with Google or Yahoo in the beginning, but you can be an affiliate of System1, SEDO, Tonic or any other Google & Yahoo search partner.
Basically, this is how a Search Arbitrage Start-up company gets established, and then based on their own success few of them get the opportunity to get a big hedge fund from different lenders by sharing revenue or net profit with them.
Since the payout usually happens between a 30-45 days period, It’s a pretty lucrative deal for Investors.
For example, companies like Ask.com, about.com, and AM Productions have raised their revenue from $50K to $50M a month in the last 10 years following the same process.
As I have mentioned in the beginning, since 2008 the search market is getting bigger and bigger, as well as technology.
Due to high demand and supply, Search Engines had to update their policy multiple times for search arbitrage activity and now it’s pretty strict in terms of traffic source, GEOs, Ad copies, Traffic quality etc.
So I can assure you, this market is controlled by very high End algorithm from google, yahoo and other search engines.
Due to this multiple quality assurance through various metrics, this market is less volatile than any other arbitrage business.
Previously people used to drive lots of push, pop other low quality traffic to google, yahoo and other feeds,
but nowadays every search engine updated their policy and they usually provide different domain URLs for different types of traffic sources.
It means if you are intend to drive traffic from any Display network, then they will provide you specific URL which will count only your display traffic clicks,
same way if you wanna drive traffic from Native to search, then they will provide you different domain URLs, which will count only native traffic clicks.
Now a days, few feed partners provide more specific domain URL by traffic source, it means they provide individual domain URL for Taboola, Outbrain, Facebook, GDN etc.
In this course, we will discuss each of the points you need to know before you can start your own Search Arbitrage business.
