Hello, I am somewhat familiar with arbitrage but this particular situation is confusing me. Let me explain. I am in a foreign country at the time. When I google "ringtones" I see 4 results. 2 of them are pretty straight forward while the other 2 are difficult to grasp. The first position ad leads to a basic made for adsense site with google ads all over it and affiliate offers interspersed with some text. It is a one page site and the only escape is the backbutton, affiliate offers or adsense clickthrough. Now here is where I get confused. The affiliate offers are not valid in the country where I am viewing the site from, so that is a loss for the publisher. The sites in the adsense ads also lead to either sketchy made for adsense sites of the same sort or directly to landing pages for affiliate offers that, once again are not valid for the country I am in. Here are my questions: How do the publishers sending this country's traffic to affiliates that are not valid justify this cost. How is the original site making money with arbitrage considering he is paying for adwords for search and then either sending this traffic to adsense for content on his site or to empty end affiliates that cannot convert? Since the site has been in the number one position for a while now, I can only assume they are profiting by it, I just can't conceive of how. Can anyone explain?
There are a lot of inexperienced adwords users (a lot of people are jumping on the ringtone band wagon). They probably aren't geotargeting their campaign and are losing money on those clicks (google will gladly take their money without pointing out their mistake) - or perhaps the end user has a way of signing up for the program (despite it not appearing to be valid in their country?). It doesn't mean they are generating any clicks just because they are in the number #1 position. If there are only 4 ringtone ads showing - it is most likely not a very active term.