Affiliate Marketing, CPA, Traffic

To make a long story short, affiliate marketing is the buying and selling of advertising on the internet. The main entities involved are the webmaster (arbitrator), affiliate program, and advertiser. The object of focus is traffic, which refers to any individuals attracted to a website, social media, messenger platforms, etc.

Let’s first examine the essence of traffic arbitrage. The process of launching advertisements is generally understood: a person enters a platform (let’s take Facebook’s ad account as an example), pays money, sets targeting options (gender, age, etc.) for the desired target audience, and uploads images (creatives) to be displayed. While this is clear, let’s explain for whom this is done.

Imagine a store with a website selling products, and the store wants to sell them. Therefore, they hire a targeting specialist who drives traffic to their website through a link. This store becomes the advertiser. The advertiser is not concerned about how many times their ads are clicked; they only care about real customers or at least people who have submitted inquiries on their website. Thus, they will only pay for the desired action – CPA (cost per action). This could be payment for a potential customer who registered on the website, known as a lead (CPL – cost per lead), or payment for a sale (CPS – cost per sale), and so on. Advertisements on the advertising platform are usually available for purchase based on other models, such as cost per click (CPC) or cost per thousand impressions (CPM). Consequently, a targeting specialist with a budget of 1000 rubles can buy 10,000 impressions, which will result in 500 clicks, then 30 inquiries, and eventually 10 actual customers. We will also learn how to calculate and analyze these numbers later.

Now that we understand how a targeting specialist works, let’s talk about traffic arbitrage. What is the difference? A targeting specialist has a budget, but they do not earn income based on the number of customers they bring (typically). So what does an arbitrator do? They negotiate with the advertiser on a fixed fee for a specific action, such as acquiring customers. Let’s say in our case, the payment for each sale is 300 USD (as decided by the advertiser, based on their business economics). The arbitrator acts similarly to a targeting specialist and buys traffic for their own USD rubles, which brings in 10 sales. Consequently, they receive 3000 USD, resulting in a net profit of 2000 USD.

The main verticals where this purchasing model is prevalent are:

Gambling/betting – casinos and sports betting

Dating – dating websites

Nutra – weight loss products, dietary supplements, etc.

E-commerce – general consumer products

Additionally, there are mobile subscriptions, quizzes (swipes), and adult games (games with erotic undertones).

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