What is traffic arbitrage in simple words, how to make money from it + 5 best CPA affiliates

Classic arbitrage refers to “risk-free” operations. Strict adherence to all rules eliminates most of the risks associated with the uncertainty of the price of an instrument in the future (these risks are typical for speculation). In the worst case, there remains the risk of loss of income.

The use of the futures contract market provides ample opportunities to conduct highly profitable transactions with limited risk. One example would be an arbitrage operation on spreads between the spot market (for example, the MICEX stock market section) and futures (the RTS derivatives market - FORTS). This spread is also called "basis" or "spread".

Differences in the expectations of market participants regarding changes in the prices of the underlying asset in the future, as well as interest rates for different periods, lead to the fact that the prices of the futures contract and the underlying asset constantly fluctuate relative to each other (their prices either “converge” or “diverge” ), resulting in the possibility of arbitration operations.

The essence of arbitrage on “spreads” is as follows: the trader simultaneously sells a futures contract and buys spot (selling the spread) on the “divergence”; after the spread narrows, the trader performs the reverse operation: buys a futures contract and sells spot (buying the spread). In this case, the trader receives the difference in the selling and buying prices of the spread in any case, regardless of price fluctuations in the market.

Traffic arbitrage - what is it?

Traffic arbitrage is one of the most profitable ways to make money on the Internet. I already said above that its essence lies in the resale of traffic.

A successful arbitrageur can easily increase his capital. Unsuccessful - it’s just as easy to lose all your money.

The earnings of arbitrators always amount to hundreds of thousands of rubles. However, considerable investments are also required here.

Usually a person invests about 100,000 rubles and receives 200. That is, he multiplies his money by about two times. But there are also higher numbers.

Basic concepts:

• An arbitrageur (webmaster) is a person who makes money (or tries) from traffic arbitrage.
• Offer - an offer (of a product or service) from an advertiser.
• Traffic - people, visitors, guests, customers, etc.
• Leads are visitors who performed a target action (bought something or left a request).
• Creative - a banner, picture, video that will be used in advertising.
• CPA (Click Per Action) - payment for a target action: purchasing a product, registering, filling out an application, etc.
• RevShare - payment of a percentage of the profits from referred clients.
• CPA network (affiliate) is a service that combines many offers from different advertisers.
• Landing is a one-page page on which an offer is advertised.
• Pre-landing is a landing site that is created by an arbitrage specialist. It is used to “prepare” the user to move to the main landing page. It can also filter out bots.
• Conversion is the ratio of leads (those who took the desired action) to the total number of people who went to the advertiser’s website.

Disadvantages of classical arbitrage on extensions

The main disadvantages of classic arbitrage on spreaders is the extremely low profitability.

The main arbitrage instruments on the Russian stock market are: GMKN, LKOH, SBER, SBERP, GAZP, ROSN. Let's look at the spreads on the main instruments of classical arbitrage for the period from 09/15/2010 to 10/13/2010 in the figures.

How it all works

To make money through arbitrage, you need to find a suitable affiliate program. Beginners can first go to popular CPA networks like Admitad or M1. There are many offers out there that you can test.

After choosing an affiliate program, you must decide on the offer and the method of attracting traffic. Regarding offers, I won’t recommend anything yet; new ones appear every day. But we can talk about channels for attracting traffic.

Typically, the following options are used to drain traffic:

• Contextual advertising: contextual advertising from YAN or AdWords. Appears on the top lines of search results, partner sites, simple blogs like mine, etc.
• Facebook Advertising: Advertising network within the social network Facebook. It is in definite demand both among Russian and foreign arbitrators.
• Instagram Advertising: Another popular marketing channel. In fact, Facebook and Instagram have one advertising account. Therefore, very often arbitrators work in these two areas simultaneously.
• Vkontakte advertising: advertising network inside VK. Now this social network is gradually tightening the screws, but you can still pour money through it. Although this method is considered quite complicated.
• Advertising on Odnoklassniki: an advertising network within this social network. It is also actively used by arbitrage traders. Products are especially often dumped there.
• Teaser networks: mostly gray and black projects work with teaser networks. Blocks with such advertising can be seen on torrents, yellow news sites, movie resources, etc. However, you can get quite a lot of high-quality, interested traffic through this channel.
• Banner networks: Many sites work with banners. Now this type of advertising is losing its popularity, but someone still pours through them. Even if not in such large volumes.
• Push networks: Push networks are actively used by many projects. Through them you can get targeted traffic. Push notifications are especially often used for dating, installing applications, etc.
• Telegram channels: usually this method is used by those who pour money on bookmakers. Thematic channels with forecasts or simply useful information are created and traffic is attracted through them.

This is not the entire list. Many people use clickers for leaking (this type of advertising is very often used on adult sites), email newsletters and even their own media resources.

Which traffic source to choose is up to you. For each offer, a specific source will be relevant. It’s better to talk about this with support or experienced arbitrage specialists. Based on their experience, they will be able to tell you what is best.

From myself I can say that it is best to work with one or several traffic sources. You need to study advertising offices, learn to draw creatives for a specific audience, etc.

Now it’s worth talking about where this traffic is going. Usually these are landing pages from advertisers, which briefly describe the essence of the offer.

Here's one of them:

Landing page for a top offer from M1-Shop

As you can see, this example briefly describes the benefits of the product and contains a call to action. Such a one-page website will be able to interest a potential buyer and force him to place an order.

This is where all traffic usually goes. This is a standard scheme: advertising network - landing page . But there is another option with draining to the pre-landing (layout). A blog site or something like that can act as a spacer. The pre-landing page is designed to weed out bots and unmotivated clients.

That is, the pre-landing scheme will look like this: advertising network - padding - advertiser's landing page. It's quite convenient.

In general, as I already said, the whole point comes down to buying traffic from some advertising network and redirecting it to such a landing page. A certain number of people must submit an application to purchase a product/service, after which you are entitled to a payment.

It is necessary that the amount from all payments exceeds the cost of purchasing traffic in the advertising network. Then you will be a plus .

Example

Beginning arbitrage specialist Vasya wants to earn some money. He already has initial capital, which he wants to spend on leaking it to some advertising network. But before that, Vasya needs to choose a CPA affiliate with whom he will work.

Vasya is a beginner, so he decided to work with the Admitad affiliate network. There are many offers there that interest him. He went to the affiliate website, created an account there and requested cooperation with one of the companies that wants to attract clients.

The company approved cooperation with Vasya because in the application he indicated that he would use Yandex.Direct, an advertising network from Yandex, for the leak. Vasya is well versed in direct messages, he knows how to set up campaigns and target advertising to the right audience.

But simply setting up an advertising campaign is not enough. Vasya needs to draw a creative that will attract the attention of users. And not just one creative, but several.

He himself doesn’t know how to draw, so he goes to the freelance exchange with a clear technical specification. In this technical specification everything is described very clearly, because Vasya knows what creatives will be able to hook the audience.

The freelancer submits the completed order, and Vasya and his creatives go to create a company in Direct. He replenishes the balance in the advertising account, sets up the campaign so that advertising is shown only to interested people and launches it.

For now, Vasya is just testing the campaign. He wants to understand how correctly he did everything. Vasya has ordered several creatives, and all of them will be tested.

Vasya will understand which creative gives the greatest results and will use it.

When you click on an advertisement, the user will be redirected to a landing page that was issued by the affiliate. This is a tested landing page that is made to the highest possible quality. All application forms work for us, there are beautiful pictures and a description of the offer.

If the user places an order, 700 rubles are credited to Vasya’s account. Vasya’s goal is to gain profit.

Vasya spent 35,000 rubles on the advertising campaign. To gain profit, he only needs 60 people to submit applications.

Since Vasily did everything as competently as possible, according to his advertisements, not 60 people, but as many as 120, fill out an application. From this, Vasily receives 84,000 rubles.

His net profit is 84 - 35 = 49,000 rubles.

This is an example of how arbitrageurs work. I hope it helped you understand the essence of this cuisine.

Types and mechanism of arbitration transactions

At its core, an arbitrage strategy is speculation. Albeit in a more complicated form.

As already noted, the main goal of an arbitrage strategy is to find related assets. Price dependence can be deterministic or statistical.

Deterministic arbitrage assumes a fundamental relationship that will persist into the future. Examples:

• stocks and futures contracts;
• shares and depositary receipts;
• the same product on different exchanges.

A statistical relationship is expressed in historical observations for no apparent reason. Such signals in the securities market do not guarantee repetition in the future. Examples:

• shares of companies in the same industry;
• futures for different brands of oil.

Next, we will consider the types of arbitrage strategies depending on which instruments and markets are used for trading and risk management.

Classic arbitrage between exchanges

In another way, such transactions are called spatial. The connection of assets in this case is expressed in their different values ​​on different exchanges. This type of trading is acceptable for trading on different platforms. If you notice a difference in the price of an asset on different exchanges, this is an opportunity to open an arbitrage trade.

For example, shares of X5 Retail Group (the company that owns Perekrestok, Karusel and Pyaterochka) are listed on the London Stock Exchange, and only depositary receipts of this company are sold on the Moscow Stock Exchange. Accordingly, subject to a detailed analysis of these instruments, it is possible to create a promising arbitrage pair.

In fact, you can buy shares where you can do it cheaper, and sell where they will be more expensive. In this case, it is necessary to take into account the features and timing of listing of foreign securities.

Arbitration between the derivatives and spot markets

The derivatives market (futures and options) and the spot market (stocks) are a classic pair for building an arbitrage strategy.

Let’s assume that the delivery futures for 100 shares of Sberbank on 08/21/2019 is priced at 20,970 rubles. The contract expiration date is December 14, 2019. As of the same date, the market price of Sberbank shares is 20,717 rubles. Provided the expiration date is reached, the guaranteed profit of using this strategy will be 20,970 - 20,717 = 253 rubles.

Taking into account market conditions, this transaction cannot be called profitable, but the general meaning of arbitrage between the spot and derivatives markets is clearly illustrated. When making such transactions, you need to take into account that the risk-free profit may be less than the minimum interest on the deposit.

Trading with a spread

When they talk about such transactions, they do not mean making a profit, but a high probability of this event occurring. In this case, you only need the derivatives section of the exchange and trading in futures contracts.

The logic of trading is that stock indices consist of a specific set of stocks. If there is a difference in the value of the index and a set of shares that makes up 80-90% of its structure, then there is a potential opportunity to make money on this difference. Two positions are created: short and long. The sum of the financial results for each is the profitability of the arbitrage strategy.

Arbitration in the foreign exchange market

The essence of the strategy mechanics in this case is as follows:

• a currency pair is purchased, for example EUR/USD;
• in fact, it turns out that euros are available, while dollars are on credit;
• This means we receive income at the euro rate, while paying the loan in dollars;
• if the difference in rates is positive, we receive additional income.

This instrument is not very popular due to low profitability and high rates of change in the market situation.

How much can you earn

Earnings from arbitrage are directly proportional to investments. That is, the more money you invest, the more you will receive. At the same time, there is a huge risk that you will lose all your invested funds. Especially if you are a beginner.

This type of income can be called risky and unstable. However, experienced arbitrageurs quite easily make a decent income and are mostly in the black.

If you want specific numbers, here they are:

• A beginner can earn 10 - 30,000 rubles.
• A more experienced arbitrageur can easily raise 100 - 200,000 rubles per month.
• The earnings of top affiliate marketers generally amount to millions. But most often, they work as a team and share all the income among themselves.

What are arbitrage transactions

Transactions based on the principle of arbitrage are interconnected. When one loses, the other wins. Operations of this kind are considered conservative strategies, and they provide a return at least higher than the deposit rate.

Arbitrage transactions can be concluded using different market instruments, as well as during different periods of time. The main condition is the interconnectedness of assets among themselves. When choosing the right pair, it becomes completely unimportant which way the market will go, because in the end you will still be in the black.

Example of an arbitrage pair

At the same moment in time, the market may experience a situation of overvaluation of one asset (for example, a stock) and undervaluation of another (for example, a futures contract for this stock). This situation is ideal for the emergence of classical arbitrage.

The situation in the multidirectional movement option can be illustrated in the table:

If the cost increases, we get the following situation:

If the price goes down, the position will look like:

Thus, in case of any outcome, we receive a guaranteed return from purchasing assets in a related pair.

Who uses arbitrage strategies

Trading in the context of arbitrage strategies is suitable for conservative investors, cautious traders, as well as large market participants who need to preserve their invested funds (banks, pension funds, etc.).

It is worth noting that high returns cannot be expected from such transactions. On average, it will be slightly higher than the coupon income from investing in federal loan bonds. 8–8.5% per year in today’s market conditions is the maximum level of profitability.

On the other hand, studying the behavior of assets in a pair can be a good school for a novice trader. By using this strategy, you will not only study the behavior of an asset in practice, but also reduce the risk of losing your investment.

Restrictions on Arbitration

Among the difficulties when using this arbitrage strategy, the following factors should be noted:

• the need to open long positions (usually the liquidity of futures is highest 3 months before expiration);
• you need to monitor commissions so that their size correlates with the feasibility of the transaction;
• to obtain maximum benefit, it is quite difficult to correctly determine the entry point into a position;
• Transactions are often fast-paced and require an automated robot to carry them out;
• in case of strong market volatility, closures with a loss are possible.

Therefore, despite the simplicity and logic of arbitrage strategies, novice traders need to treat this strategy with caution and start testing it with small volumes.

Where to start in arbitration

First of all, you must understand that earnings from arbitrage are not always guaranteed, and certainly not stable.

You will have to get your head around, test a lot of different affiliate programs, offers and methods of leaking.

All this requires money, so this method does not apply to earning money without investments.

I present to you approximate step-by-step instructions that will help you get started.

Step 1. Study the theory

If you are reading this article, then this step is almost done :). You need to understand what arbitrage is, how it all works, etc.

To do this, you need to study theory, read articles from different sources and form a correct understanding of the topic.

Already at this stage you should roughly estimate what you want to work with.

Yes, in the future, it is quite possible that you will change your mind. But reading a couple of articles about VK targeting or Facebook’s advertising account won’t hurt.

So, for general development.

Here you can read about arbitration:

• ProTraffic - media about arbitration and internet marketing
• VKontakte group M1-Shop
• Admitad Academy
• Partnerkin

Naturally, you don’t need to re-read everything that is there. Just read a few materials, watch cases, read interviews.

Step 2. Choose an affiliate program

You need to choose your first affiliate. I recommend working with proven networks that have competent technical staff. support and adequate personal account.

There are a lot of affiliate networks on the Internet. I present to you the 5 most popular CPA affiliates you can work with:

• Admitad is the largest CPA network, which has offers in a wide variety of areas.
• Advertise is another CPA network with a lot of cool offers.
• LeadBit is a well-known affiliate program that works mainly with nutra, white hat and dating. There are many different offers.
• Shakes.pro is an affiliate network with trending products.
• CPAgetti is another CPA affiliate that offers many different offers. These are mainly gutters, watches and other electronics.

Go to the website of each affiliate, study the information and decide for yourself which is best.

Each of them has its own pros and cons, but this is a topic for a separate article.

Step 3. Select an offer

Now you need to choose an offer (product or service) to which you will send traffic. Each affiliate program has its own top offers. You can try them or choose something newer.

This step is very important, because how successful your leak will be depends on the offer. Naturally, advertising, creo and other variables also influence. However, if the offer itself is not very good, then the chance of a successful drain is close to zero.

Typically, experienced arbitrageurs work in one direction. For beginners, you can test several different options to decide for yourself what is best.

Pay attention to the rating of the offer within the affiliate program. If it is high, then you can try testing it too. However, keep in mind that too many affiliates pouring into one offer is not good. This can have a negative effect.

Be sure to look at GEO, landing pages and pre-landing pages (their quality), requirements for traffic sources. All this must be taken into account when choosing an offer.

Step 4. Select a traffic source

There are recommended traffic sources for each offer. You can also read the reviews and cases of other affiliates to understand which sources will work best for a particular offer. But it’s worth remembering that bundles from tops will not always work for you. Perhaps they are already burned out.

By the way, this step can generally be put in first place, because in the future you will choose offers based on the traffic source you are working with.

For example, your advertising account on Facebook is doing well. You know how to properly set up an advertising campaign, what creatives are used, etc. In this case, it is more advisable for you to choose an offer specifically for FB, and not to be scattered on some other traffic sources.

In this instruction, I put the step in fourth place, because it will be read by beginners who have not yet understood arbitration. They will need to test several options, determine the “main” one for themselves and then work only with it.

Experienced affiliate marketers work with one or two traffic sources. They study them thoroughly and therefore count them as a plus. There’s no point in trying to do everything at once in this matter.

Step 5. Test everything

To avoid wasting your entire budget, you should test the bundles. To do this you will have to allocate some money, but it is quite justified.

It’s better to immediately identify the most converting options and make sure everything works in a positive way.

As they say: tests are everything. Don't underestimate them. This, by the way, is what many experienced arbitragers say. Even they always test their connections, although they have the opportunity to rely on intuition based on experience.

Step 6. Wait for a “hold” and withdraw your money

Hold is the time your account is verified. This period of time is different for each affiliate program: it can range from 0 to 60 days. Usually they don’t delay this, but anything can happen.

Don’t be upset if you lost to zero or even went into negative territory. Everything comes with experience; it’s very difficult to immediately start with positive results. Especially if you immediately go into merchandise or some other “difficult” areas.

Keep learning, testing, and finding connectors that convert.

Banner networks

This method of receiving traffic appeared on the Internet a long time ago; in current realities, it is less and less in demand. Users are already accustomed to the fact that bright, large banners are advertising, that is, a way to fish out money.

Therefore, this type of advertising began to scare away customers. And despite the high cost of such traffic, the result in terms of the number of conversions leaves much to be desired.

Popular banner networks include the following.

Rotaban.ru

One of the most popular banner networks in the Russian-speaking segment of the Internet. The main advantage is targeted traffic. The main disadvantage is that traffic is very expensive.

Evadav.com

A universal advertising network that includes banners, push notifications, and native advertising. May be interesting for work.

Tips for beginners

Many beginners can avoid mistakes if they follow certain tips. I tried to collect the most suitable and effective tips that will make your life in arbitration easier.

• Don't take loans, don't borrow money. If you put everything into minus, you should still be left. Especially if you are a beginner. It is better to allocate money from your personal budget, and in such a way that it does not break your pocket.
• Work in one direction. At the initial stage, you can test at least all the options. But this is only in order to later come to something specific and begin to develop in it. Working with everything at once is a bad idea. True professionals work in narrow areas.
• Test it. As I said before, testing is very important. You could say definitely. With the help of tests, you can understand what gives results and what is better to remove.
• Study your target audience. To properly set up an advertising campaign, you must understand the interests of your target audience. To do this, you will have to study it, read different materials and watch cases.
• Constantly develop yourself. In arbitration, as in any other type of activity, constant development is important. If you stop and dangle your legs, there is a high chance of falling down completely. Learn, read different sources, follow cases and news.

Email newsletters

A very relevant method of arbitration is sending messages through email databases. Especially if these databases are collected personally, for example, using your own website or blog. In this case, the recipients have a certain trust in the sender, and the letters, as a rule, are read.

It should be noted that gathering a loyal audience for arbitrage through mailings is not so easy. In addition, you need to constantly provide feedback, withstanding commercial breaks. This means that between two promotional messages, people should receive ten emails with the content they signed up for. And this is hard work.

To organize mailings, you can use special services, for example:

• MailChimp;
• MassDelivery.

The services are paid, but there are test periods or free plans due to a limit on the number of subscribers or mailings.