Thursday, July 20, 2006

Sales Lead Arbitrage: Is Google AdSense Arbitrage Evolved

Have you heard of "Google AdSense Arbitrage?" You probably have. It is a system of buying PPC ads in one market, the most popular being Google's AdWords, and re-selling them in another market (your website), a market created mainly to display Google Adsense ads, to take advantage of a discrepancy in ad prices for PPC ads. You purchase cheap PPC ads and re-sell them at a higher rate. It is a virtually risk-free profit if done properly. However, the market is saturated with such sites and the profit margin is continuously decreasing.

Have you heard of "sales lead arbitrage?" Probably not. Perhaps it is because the term has not been used before. A search for "sales lead arbitrage" shows zero results in Google. You may not have heard of it and it may not have been written about but it’s been happening on the internet for years. It is Google AdSense arbitrage evolved and it is, potentially, a lot more profitable.

Sales lead arbitrage is a system where a website "captures" a customer's information. That is, it captures the information of a customer seeking a quote, be it a life insurance quote, a residential mortgage quote, a new car quote, a home-improvement quote, a financial services quote, and so on. It takes the customer's details and re-sells it to a salesperson that specializes in that sort of business and is seeking new sales leads.

The information that the website captures is valuable; it is a customer that is actively seeking a quote and many business professionals are willing to pay good money to receive it to generate more new business for themselves. The difference in price of the PPC ad to draw the visitor to a site and the re-selling of the sales lead is multiple times the profit margin of regular Google AdSense arbitrage. And, the same sales lead could be sold multiple times. The sales lead could be sold for between $5 and $200, depending on the market.

Websites that do this normally use PPC advertising to draw visitors that are looking for a free quote to the site. The visitor usually is prompted to fill out a form with their details to receive the free quote. The information is then re-packaged and re-sold to willing buyers at a huge mark-up.

A good sales lead arbitrage website will give an immediate quote and then ask the user if they would like an agent to contact them. An example of a good site is Kanetix.com, which provides insurance quotes. Of course, to provide immediate quotes like this you must have access to a table of rates. A bad and spammy site will lead users to believe that they will be receiving an immediate quote and then turn around and sell that users information without asking for permission (perhaps the terms of service are in the small print that nobody reads).

Websites created just to display Google AdSense that have no value otherwise are littering the internet and many people consider them spam. A lot of people would agree that doing away with such sites would make for a better user internet experience. Websites designed for sales lead arbitrage can be considered spam but are not as bad as Google AdSense arbitrage sites. If done properly, like Kanetix, the sites provide "value" for the user and is a perfectly fine website.

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