How to Generate Traffic and Leads for Your Business pt.4 – ADVERTISE ARBITRAGE » Your Online Biz

How to Generate Traffic and Leads for Your Business pt.4 – ADVERTISE ARBITRAGE

This is part four of the series How to Generate Traffic and Leads for Your Business don’t miss part onetwo, and three.



When it comes to business my favorite word most of all, other than strategy is ARBITRAGE.

For an advanced explanation of what this means check out Wikipedia or this article by Willey Staley.


It’s critical that you understand this concept because it is the core of what you need to do as a successful entrepreneur continuously. 


Thanks for the re-tweet. 



What is, “How you make money?”

This should be the answer for the clue “ARBITRAGE” on Jeopardy:


It’s true.

If you understand how you’ll make money then you will in fact make money, it’s actually pretty strange and obvious at the same time.


Here’s what I mean.

  1. Cell phone companies advertise that they will buy your old phone back or you can trade it in to “Upgrade”.
    Arbitrage:  They make money twice on each deal.  First when they get your phone because they will only buy it for much LESS than what it’s really worth(Example $75 for a $190 iPhone).  Then, they make money again when you BUY their new shiny phone at 100% retail price.  It’s like a “Daily Double” if you will, shout out to Alex Trebek.
  2. Auto maintenance companies advertise that they will change your oil in 15 minutes or less AND  you get a FREE 20 point inspection.
    Arbitrage: They make money twice on this deal.  First when they change the oil in your car, they get your OLD oil for free (and they even charge you for it, “environmental fee”.) which they then resale to oil recycling companies who pays them market price for your old oil.   Second they make money when they reveal to you the result of your 20 point inspection which normally will result in the suggestion of something additional that you need to purchase and have them install like wiper blades, battery cables, worn hoses, etc.   


The one thing in common is advertising, this is the start of the arbitrage.

The same critical activity that I notice very few “bloggers” talking about.


It’s fundamental.  Even if you have a lemonade stand, you’re not “in business” until you put up your sign and pass out some flyers.

The same goes for serious entrepreneurs.

If you’re not happy with the amount of traffic, and leads your business is getting and you want to fix it fast then you must focus on your advertising arbitrage.

There are no other legitimate ways to get noticed quickly by your potential customers AND make money other than:

    This can do amazing things for your business like the story that made headlines today about the NSA spoof t-shirt.  This company is getting amazing pub from this coverage and they will sell a ton of shirts because of it.  There’s also the story from last year about the dude that tattoo’d Mitt Romney’s logo on his face. Publicity stunts work, the question is who is willing to pay this “COST”?
    This is much easier said than done.  Who knows who you have to know in order for your business to get coverage in the local, regional, or national press?  It’s not easy, in fact it’s extremely hard AND it’s not in your control either.  This is one thing that Amazon founder Jeff Bezos won’t have to worry about anymore since he bought the Washington Post if you know what I mean.
  • Even if you taught your pet chihuahua  how to break dance on a skateboard you would still  have a hard time making this video “go viral”.  The internet is like that.  Some videos get millions of views for obvious reasons like Beyonce’s latest video, some get millions of views and it’s inconceivable as to why(like dumbass pictures of cats), some are so AWESOME they even have QUINCY JONES involved and they still only barely get a million views.




Big companies suffer failures when they make things too complicated like Microsoft did to Windows 8, small companies fail to grow when they don’t establish a dependable advertisement arbitrage.

This is like a trading route that you take to make money reliably due to the quality of your products and services and your understanding of the market, here are the three main keys:


#1 – The Offer
You must explain the benefit of your product or service clearly and BRIEFLY to your potential customer. This is the “hook”,  tractor beam, “value proposition”, “what’s in it for me”, etc.

If your offer is not enticing enough to cause a serious response from people when you test it PLEASE stop immediately and rework your offer and RE TEST until it works.

Here are some of the most effective types of offers that the public is already trained to respond to:

  1. BOGO.  Buy one Get one Free.
  2. LOSS LEADERS:  Clearance/Liquidation sales, ex 75% off on ONE particular item.  Huge markdowns on popular items attract the public in droves who’ll then buy other items while their in your store at FULL PRICE.
  3. FREE SHIPPING/INSTILLATION/ASSEMBLY:  These “all included” types of offers are popular with the public because they are easy to understand and it makes sense.  People can easily see the benefit in NOT having to install or assemble their new purchase.  Rather it’s physical like a table or virtual like a WordPress plugin, people are motivated by convenience.

Here are some examples of some excellent offers:



#2 – The Location
Nothing will determine WHO will see your advertisement like WHERE you place your advertisement.

This is true in all forms of media, from radio ads on country stations, television commercials on BET, or internet ads on HuffingtonPost.

Where you place the ad will determine where your business goes.

In fact a poor ad published in a great location will do much better than a great ad in a poor location.

Think about it.

If you’re promoting  7 day Alaskan cruises do you think your ads will perform better on the skateboarding website or on the wine snob website?

Perfect example, Starbucks.

They have no problem charging people $7 for a cup of coffee because they always place their ADS and  stores EXCLUSIVELY on the parts of town where people can afford it.

Example effective advertisement locations, notice mobile and creative:


#3 – The Timing

If your offer and location is good and you are still struggling at attracting new leads for your business the problem you are most likely facing is TIMING.

It’s not what you’re doing but when that’s the issue.

The fact is people react to advertisements or offers differently at different parts of the day, week, month, and year.

In January people don’t REALLY want to hear about your sales offer, in December they expect you to have something on sale for the holidays.

Perfect example, MOJO Themes.

Every year I wait on MOJO to announce their annual sale, I always buy my themes during this time of year as they usually go crazy with tons of great themes and add ons that come with the bundle.  They usually call it the cyber bundle if I can remember, anyway the point is this offer works so well because #1 it’s a great offer AND #2 it’s well timed.

Another example, Hair Salons.

It has been proven that people pay closer attention to radio ads on their morning commute.  This is a perfect opportunity to make your strongest offer to your potential customer such as, “FREE style and nails with any perm”.  This is something that can resonate in their mind through the day and can increase the chances of them taking action and calling you today.  Compare this to them hearing the ad on their evening commute and having to remember your offer until the next day.   

However timing should be just right.  Not too late OR too early, here’s an article about how people are getting annoyed at holiday sales promotions starting too soon.

Speaking of timing I was perfectly timed to film this Mazda commercial recently, it was interesting seeing what happens behind the scenes at a professional video shoot, WATCH:




Let me put it like this.

When 45 of the top digital marketers, bloggers, and social media experts came together for the Social Media Success Summit  what do you think was their primary means of gaining sales for this event?

A) Word of Mouth. Grass roots.  They sold tickets from the demand build up organically from the people who read their blogs.

B) Advertising.  Old school banner advertising, it’s a numbers game, X amount see ad, Y amount click link, Z amount buy ticket.

C) SEO.  They ranked #1 for all types of important keywords like “social media success convention” and converted them to sales.






Scrolled down for effect.





Wait for it.



B) Advertising.  Old school banner advertising, it’s a numbers game, X amount see ad, Y amount click link, Z amount buy ticket.

It’s true.

Now, I can’t be 100% sure what they did exactly to get  sales for this event as I was not involved, I didn’t set up their banner advertisements so I don’t know how much they paid per click or how many clicks it took them to sell one ticket.

However, I can tell you that I was seeing ads appear for this event for SEVERAL WEEKS leading up to the summit which kicked off on October 1st through October 23rd.

Therefore one can only conclude that they in fact maintained a high enough conversion rate where they were recouping the cost of their banner ads AND making money on top of that.

Therefore they had established an Advertising Arbitrage.

For example If one week’s worth of ads costs them $20,000 they were making $30,000 in sales for the event.

This allowed them to continue the existing ads and even expand by adding more advertising which I also noticed as the event became closer.





  1. Create a marketing budget.  If you don’t have one get one.  This is why you don’t have sales, you haven’t budgeted to have sales.
  2. Invest 100% of this budget (for the month #1) into developing an offer that you KNOW people will go for.  Example Cookies buy one get one FREE.
  3. Run test ads with 10% of the budget (month #2), buy ads for your offer.
  4. Review the traffic and sales that results from this first test.
  5. Make adjustments to your advertisement timing and location and run test #2.
  6. Review the traffic and sales that results from the second test.  Continue this test/review process until sales from your offer break even with your costs.  If no sales result continue testing into the next month until you have reached this “break even point”.  Get help if needed before you run out of money.


How much to spend on a marketing budget?  

How much do you want to earn in that month.  For example if a great month of NEW sales for your android app is 250 new sales then you should spend at least the amount that you would earn from selling 250 apps per month.



Now that you have established one profitable advertising channel your focus now is to maintain what you have created and expand it to new channels.

  1. Grow via expected alternatives.  
    Seriously, do you know the difference between Discovery channel and National Geographic when you’re watching a show?  Well, the chances are your customers don’t either.  If you have established your arbitrage on Discovery channel chances are pretty good you’re ads will convert comparably well during the same times on NatGeo.
  2. Saturate one media before changing to another.
    If you established your advertising arbitrage using internet banner ads do not go to print advertising quite yet as they are two entirely different mediums and they convert differently.  Instead of testing different waters take your internet growth as far as you can take it first.  This will allow your business to benefit by profiting from your previous experiences instead of falling into the pitfall of the “starting over from scratch syndrome” where you’re trying to figure out a new media platform instead of executing off of what you already KNOW.  Radio, TV, and Internet can be done simultaneously by GEICO with no problems but that’s because they have boatloads of dollars to spend and tons of employees, you don’t.
  3. Cut costs, buy long term ads.
    This will extend your income over the long term more than anything else.  If you have noticed that you are getting a ton of traffic from one particular site negotiate with them to allow you to run ads for a longer period of time for a lower monthly price.  If your conversion rate continues you will see an increase in profit as your costs for the same ads are lower.




NOW it’s over to you.

What are your thoughts about advertising.  Are you giving it a second look now that you see the potential.

If you found this post useful thanks for sharing everywhere peace.



RT to @mfbellemare  for sharing the arbitrage article.

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What's up! I'm Darnell the founder of Your Online Biz. I believe "We come from absolute greatness. Accomplishing the extraordinary is the least that we should expect from ourselves." In 2012 I launched TruckLicense.net which redefined how to get a CDL without expensive trucking school. I also created the #IBCT - International Blogger Championship Tournament which features the top 64 blogs worldwide in a competitive comparative analysis. When you support me you help #PayItForward as I contribute 10% of my online income to help children in need.

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4 comments on “How to Generate Traffic and Leads for Your Business pt.4 – ADVERTISE ARBITRAGE
  1. Shiv Saroya says:

    Hi Darnell,thanks for share very informative information with us, arbitrage was new word for me. but now i know more about arbitrage.great job

  2. Jijin Mohan says:

    Thank You Darnell Great Point you have shared here. I will look after all those points. Thanks for the detailed explanation.
    Jijin Mohan recently posted…Top 5 Kids Apps For Learning PurposesMy Profile

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