Pure arbitrage (using ppc): The technique in which a publisher buys mass amounts of traffic from various PPC platforms. The traffic is directed to a site that then serves the user a page that contains outbound links that are monetized on a CPC basis. The publisher tracks both the cost of the inbound traffic versus the income from the outbound traffic, and attempts to monetize the ‘spread’ as much as possible. For example, if I bid $.09 for the keyword ‘sears washer dryer model RX21223′, someone clicks on my ad, lands on my page, and sees a link for ‘Buy Sears Washer Dryer – Free Delivery’, which is a link I got through a feed at Yahoo, and that click pays $.25, I just netted $.16. If I can do that on a mass scale, I am running a nice little business.

This technique is different than using PPC to do affiliate arbitrage.

Affiliate arbitrage (using ppc): The technique in which a publisher buys very targeted PPC traffic focused around a theme or product. The traffic can be sent directly to an affiliate landing page or to a publisher hosted page that contains one, or several, affiliate offers.

In my particular case, I was trying to figure out how to track conversions back to keywords on an affiliate I was promoting through Commission Junction. It’s a little hard to figure out due to poor documentation on CJ, but I’ll help you get right to the goods.

Basically, CJ uses SID’s, or site ID’s I believe they call them. Normally, people apply these to a site, so you can tell which site is converting for a particular advertiser they are promoting. In this case, we are going to use SID’s to track a PPC campaign at the keyword level.

Let’s say our campaign is for payday loans, and we’ll use 2 keywords as a starting example. My keywords are:

pay check advance
“pay advance”

Notice the second one is phrase match. CJ will give you a long url under “keyword links” that look something like this:

http://www.dpbolvw.net/click-xxxxxxx-xxxxxxxx

Obviously, the x’s are placeholders. Your affiliate id will be in there. Now, as is, you can’t tell which keyword generates a sale or conversion. Adwords conversion tracking won’t tell you either. We need to use SID’s to track the sales. You can build out a nice Excel formula to do this on a mass scale if you have a lot of keywords, but I’ll show you how to do it first with just a couple.

Take your base url:

http://www.dpbolsd.net/click-xxxxxxx-xxxxxxxx

add a question mark

http://www.dpbolsd.net/click-xxxxxxx-xxxxxxxx?

add sid=

http://www.dpbolvsd.net/click-xxxxxxx-xxxxxxxx?sid=

then add the keyword, replacing any spaces with +

http://www.dpbolsd.net/click-xxxxxxx-xxxxxxxx?sid=pay+check+advance

for phrase match keywords, you can do this:

http://www.dpbolsd.net/click-xxxxxxx-xxxxxxxx?sid=pay+advance+phrase

That’s it. Just plug those urls into the keyword creative and you’re in business. Now, in your CJ account reporting, you will be able to see which keywords converted by looking at the report details. Viola. You’re a millionaire!

Let me know if you have any questions or suggestions.