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Pay per click arbitrage, commonly known as arbitrage, is a practice that allows second tier search engine, directory, and vertical search engine web publishers to engage in the buying and reselling of web traffic for profit. The process of pay per click arbitrage begins with a second tier search engine, directory, or vertical search engine purchasing traffic for a certain price, then reselling that traffic to other clients through a bid process on visitors searching for the particular keyword that sends the web page visitor to the originally advertised website. The success of pay per click arbitrage is based upon the idea that the purchaser can resell the traffic gathered for more than the original price of the original pay per click services.
First tier companies using pay per click arbitrage also use this form of paid inclusion as search engine optimization. Google AdWords and Yahoo! Search Marketing are involved in a form of pay per click arbitrage called affiliate arbitrage, which allows participating companies to bid on traffic generated by the keywords provided by these programs. Google AdWords and Yahoo! Search Marketing then have links to their own websites or link directly to a merchant site that has ads for their own programs.
Pay per click arbitrage is not considered a search engine optimization technique since it is a for-profit tool, whereas bidder participation is a search engine optimization technique, as it draws traffic pertaining to certain keywords.
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