With all these “How to make money on the internet sites” around you would guess that it is a pretty easy thing to do. While it is still possible to monetize a site effectively, the old game of CPC (cost-per-click) arbitrage is coming to an end. While reading the article “Turning Dimes Into Dollars: The Basics of Low-Bid PPC” I began to wonder about some of the practices discussed. Todd Mintz describes Jeremy Schoemaker’s method of making money on the internet.

ShoeMoney is best known in the SEM community for his ability to hyper-monetize websites through large volume affiliate sales funded by PPC minimum bids.

In other words, target a given niche using CPC advertising and then try to sell them a product since you probably have a good guess about what types of products they would be interested in. While this is a good model, it is only good as long as other people stay away from your market. As more advertisers come in, the margin on each affiliate sale decreases rapidly. Mintz goes on to further explain his experience with advertising on his blog:

I turned off my North American Google, Yahoo & MSN ads since I got little traffic from minimum bids and when I increased the bids high enough to draw traffic, my ROI was only a fraction of what I earned in Europe. Unfortunately, I wasn’t able to sell my products into Asia. Asian affiliate programs seem to be the least developed… however, I think it’s just a matter of time before that changes.

At first glance it seems like Todd is already experiencing what would be a rational result in this type of revenue generating model. The hands-off approach of generating revenue only exists under two circumstances:

  1. The market has not yet been flooded and there are still opportunities to milk a given niche for cash flow
  2. Create your own product and sell it to customers

The second approach is obviously much more secure because you own the actual product that you are selling. Many other bloggers are still using the first approach. While I don’t think that the market for CPC arbitrage has been eliminated (there are always be arbitrage opportunities in any market), there is now fierce competition and blog monetizers have to begin looking elsewhere. The only really effective way of monetizing a blog over the long haul is building a solid readership base that regularly reads your blog. As you build your base you can begin to use advertising tools more effectively to generate revenue. As an experiment, I will try to monetize this blog over the course of the next 6-months while explaining it every step of the way. Let’s see what happens!