Well, it is the practice of directing traffic from a pay per click service to a page that has adsense ads. Adsense ads are nothing but other people's pay per click ads that are shown on your web page. When a visitor clicks on these ads, you receive a part of what the ad cost the advertiser.
Although this sounds pretty simple, in practice, it isn't as simple as it sounds.
The basic idea of arbitrage is buying low and selling high.
So people that use this method need to buy their advertising from google at a low pay per click and then reap revenues on their google adsense at a higher pay per click rate giving them a positive margin or profit.
And you are right. It is not as easy as it sounds. Many factors are involved. Click fraud, smart pricing, high cost per click risk, going over budget, not understanding the ppc model and others.
What is Adsense Arbitrage
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