If you've been researching techniques for making money online, you've probably come across the term "AdSense Arbitrage" a time or two. And many people don't quite know what this means, or they're confused about how it can make you money. So let's review what exactly AdSense arbitrage is, and how you can make money with it.

The Basics:

AdSense is an affiliate style program offered by Google, which allows website publishers to place ad blocks on their pages. When someone clicks an ad in one of those blocks, the website publisher earns income from each of those clicks. Once the website publisher has earned at least $100, Google will send them a check at the end of the following month.

AdWords is a classified ad style advertising service offered by Google. This service goes hand in hand with the AdSense system. AdSense publishers do not have to use AdWords, and business owners who advertise on AdWords also do not have to be AdSense publishers.

With AdWords, businesses and individuals place small classified ads on the Google search engine. These ads are designed to appear when certain keywords or phrases are typed by search engine users, and the advertisers pay a specific amount of money each time someone clicks on their ad. AdWords ads are displayed along the right hand side of all search engine results pages, plus they're displayed on the websites of AdSense publishers.

Arbitrage

The term "arbitrage" simply means you're going to try and make a profit from price differences between one market and another. AdSense arbitrage then, is the process of placing advertisements in the Google AdWords system, which leads visitors to a website page which has AdSense ads on it.

The purpose of Google Arbitrage is to buy clicks cheaply in the AdWords system, then get those visitors to click ads on your website which pay more money than you're paying for the clicks.

This is a little complicated so let's look at a fictitious example. Say for instance, you have a website all about pet health care products. And you've discovered that when someone clicks on an AdSense ad at your site, you earn about a dollar on average.

You then do a bit of research, and discover there are some pet related keywords you can get listed for via AdWords, which will only cost you about five cents each time someone clicks one of those ads to visit your site.

So you set up ads where you're paying just 5 cents each time someone clicks to visit your site. And when those visitors leave your site, they do so by clicking one of your AdSense ads which pays you $1. If all the visitors who click your AdWords ad that you pay 5 cents for, also click on one of the AdSense ads on your website and earn you $1, you're making $0.90 profit for every visitor you pay for through the AdWords advertising system.

And that's AdSense arbitrage in a nutshell. Buy clicks on Google for a very low cost, then get those visitors to click a higher paying AdSense ad on your website.