To play the arbitrage game, you definitely need a source of cheap traffic. Further condition is that the traffic must convert - clicking on ads is the easiest conversion you can ask for, but still, there are dozens of dirt-cheap PPC engines, which are nothing more but scam. You will get zero or very low CTR from the traffic they send. Or you will get no traffic at all, which is almost equally bad.

Using AdWords to play the arbitrage game would be very tricky, because (a) AdWords has relatively high bids, which means that the spread between what you pay and what you get would very thin (or most likely - negative), (b) it has many systems in place to monitor the quality of your landing pages, ads, etc. - if you do not deliver on your promises, they will lock your keywords and demand ridiculously high bids to unlock them.

Are you getting ready into this little venture into the arbitrage land? If not, you definitely should! It seems that many exciting things are ahead of us.

I've browsed through hundreds of posts and blog posts on arbitrage in order to find the best way to conduct my little test. Eventually - the plan was BORN.

Ok, so here's what I will do over the next new days:

1) I will try to find two, potentially profitable niches, using either a method described here and here, or yet another method, which still awaits description. I will try to find one niche with very strong "buy" characteristic and another, where attitude would be more like "research". I will also try to make sure that all related keywords get at least one million searches at 7search.com - this is the 2-tier network that I will use to drive traffic to my test sites. I've already opened an account with them and funded it with an initial deposit of $50.

Well, as promised, I am getting ready for my arbitrage series. As this is a relatively new field to me (even though I know the theory, I am just lacking some practice :-)), I thought it would be a good idea to first learn about what worked for other people and where they failed.

But first, for those of you, who maybe are absolutely new to the arbitrage idea, a little explanation would be in place. There is another (excellent) blog, where you can find a very good introduction. Let me quote one paragraph here:

It's a new year (all the best to all of you - I hope 2007 will be even better for you than 2006!) and I have a couple of announcements to make:

• We are introducing some tweaks to the general layout and navigation. For example, you can now use the Google-powered search (in the top-right corner), which is quite spiffy thanks to some Ajax magic. I've also removed Adsense from the main page.
• We have an alpha version of a new tool, which may be very helpful to people, who need to find a lot of high-quality affiliate programs fast. A separate announcement will be made in a few days, when we tackle some remaining bugs and add the last few features still missing.

I am also going to start a new series on Arbitrage - I know it is rather late, many people gained really lot of insight into this area in 2006, but I somehow always delayed my personal forays into this venture. Anyway, I will write several posts, documenting my attempts to break even or - preferably :-) - make some decent profits. The series will cover things I can handle pretty well - like keyword research, niche discovery etc., but also some things, which I intend to subject to some heavy testing, like page layout, Adsense and Adwords strategies etc.

I expect at least one post per day for the next several days, documenting my successes and failures with arbitrate. Hopefully, it will prove useful to some of you as well.

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