There are many ways to make money online, but online advertising is one of the most profitable. The three top methods in this field are media buying, affiliate marketing, and traffic arbitrage. Thanks to the rapid increase in global online ad spending, these strategies are popular and very effective for increasing sales and brand awareness.
Online ad spending is likely to exceed $870 billion by 2027, so professionals working in media buying, affiliate marketing, and traffic arbitrage have the potential to earn significant income. Their earnings often depend on their experience, skill level, and campaign success.
Media buyers typically earn between $56,000 and $98,000 annually, with professionals making over $150,000 annually. Affiliate marketers can make from a few thousand dollars to over $100,000 a year, with top earners, known as super affiliates, making well into six figures. Traffic arbitrage pros can earn from $60,000 to over $200,000 annually.
Understanding the Differences
While media buying, affiliate marketing, and traffic arbitrage are forms of online advertising, each has unique characteristics. Let’s explore each profession to understand these differences and what sets them apart.
What is Media Buying?
Media buying is the base of paid marketing strategies. It involves identifying and purchasing ad space on channels relevant to the target audience. The main goal is to secure these spots at the best times and at the lowest possible cost. Media buying began with traditional television, radio, and print channels and graduated to digital platforms like websites, social media, and streaming services. When done effectively, media buying maximizes exposure to the target audience while minimizing costs, ensuring the best possible return on investment.
Role of Media Buyers
Media buyers take insights from media planners about marketing goals and audience preferences to purchase ad space strategically. This involves negotiating with websites, ad networks, and other channels to secure the best ad placements at optimal times and durations, all within budget constraints. One person would do both on a small scale.
They use marketing performance tools to monitor key metrics, ensuring ads are placed correctly and meeting campaign objectives. Effective media buying is more than just transactions. It involves building solid relationships with media owners, publishers, and ad networks to achieve greater reach with less investment.
Methods of Media Buying
Media buying is conducted in two primary ways:
Direct: Media buyers establish direct relationships with publishers to negotiate ad inventory. For instance, they might collaborate with a publisher with several sports and wellness websites to place fitness equipment ads. This hands-on approach establishes personalized deals and tailored ad placements.
Programmatic: This method uses automated technology to purchase ad space. Programmatic buying leverages algorithms and data to buy impressions in real-time, streamlining the process and making it more efficient. Here you get precise targeting and optimization, ensuring ads reach the right audience at the right time.
How Digital Media Buying Works
Digital media buying is predominantly programmatic, automating the purchase of ad impressions. While negotiations are still part of the process, they happen quickly through open and private marketplaces.
Programmatic buying includes three main components:
Demand-Side Platforms (DSPs) allow advertisers and agencies to set up campaigns, bid on ad inventory, and optimize ads based on performance metrics.
Supply-Side Platforms (SSPs) are the publisher’s equivalent of DSPs, where they sell their ad inventory.
Ad Exchanges are marketplaces where advertisers and publishers buy and sell ad inventory through real-time bidding (RTB).
In addition to RTB, impressions can be purchased through private marketplaces, where access is limited to selected buyers, or via programmatic direct, which involves fixed-cost purchases without bidding. This approach ensures a more controlled and targeted ad placement strategy.
Role of Ad Networks
Ad networks streamline the advertising process by gathering available ad space from various publishers, creating a large inventory for advertisers. Here’s what ad networks do:
- Ad networks collect ad space from multiple publishers. This inventory includes various ad formats, such as banner ads, video ads, and native ads.
- The collected ad inventory is based on audience demographics, content type, and user behavior. This categorization helps advertisers target their ads more effectively.
- Ad networks use sophisticated algorithms to match suitable ads with the right placements. They consider the advertiser’s targeting criteria, such as keywords, audience segments, and budget constraints, to find the most suitable ad spaces.
- Ad spaces are sold through RTB or at fixed rates. In RTB, advertisers bid for impressions in real-time, with the highest bidder’s ad displayed. In fixed-rate sales, ad inventory is sold at a predetermined CPM.
What is Affiliate Marketing?
Affiliate marketing is a performance-based strategy where individuals, known as affiliates, promote another company’s products or services. They are often content creators who use best content marketing practices in their channels.
Affiliates use unique links to track referrals, and when a customer purchases through these links, the affiliate earns a commission. These commissions can be a percentage of the sale price or a fixed amount per sale.
You start affiliate marketing by choosing a niche that aligns with your interests and market demand. Then, you research various affiliate marketing programs and affiliate networks, each offering different terms and conditions. Key factors to consider include payout rates, commission structures, and available promotional resources. Once you’ve selected suitable programs, you create content to promote their products or services, driving traffic through various channels. You could use social media, blog posts or multiple other ways to promote your products. Tracking and analyzing performance metrics help you optimize your campaigns for maximum results, allowing you to scale your efforts and generate passive income over time.
Types of Affiliate Marketing
Affiliate marketing can be categorized into three types based on the relationship between the affiliate and the product:
- Unattached Affiliate Marketing: In this model, the affiliate has no direct connection to the product or service they promote. They need more expertise or authority in the niche and typically run pay-per-click (PPC) campaigns, hoping shoppers will click their affiliate links and purchase. This approach appeals to those looking to generate income without deep product or customer relationship involvement.
- Related Affiliate Marketing: The affiliate is connected to the niche audience but doesn’t necessarily use the product. These affiliates often have an established following and some influence within the niche. For example, a fashion blogger promotes a clothing brand they haven’t personally used. While they can effectively generate traffic, there’s a risk of recommending poor-quality products, which can harm their credibility.
- Involved Affiliate Marketing: This model involves affiliates who have personally used the product or service and trust its quality. They can make credible claims about the product’s effectiveness, using their experiences to market it. Although this approach requires more effort and time to build credibility, it typically results in higher trust and better long-term payoffs.
What is Traffic Arbitrage?
Traffic arbitrage is a strategy in which traffic is bought at a low price and sold at a higher rate, allowing arbitrageurs to profit from the price difference. In this process, they act as intermediaries, redirecting traffic from one source to another. This involves finding undervalued traffic sources, purchasing the traffic, and then selling it to advertisers or platforms willing to pay more. By efficiently managing these transactions, arbitrageurs can generate significant profits from the difference between the purchase and sale prices.
Types of Traffic Arbitrage
Several types of traffic arbitrage exist based on the kind of traffic you send:
Display to Search: You buy banner traffic and redirect it to related search results. Since display traffic typically costs less, this method is a safer financial starting point.
Search to Search: Purchase traffic linked to a lower-cost keyword and direct it to a feed provider for a similar but more expensive keyword.
Social to Search: Acquire traffic from social media platforms and direct it to search results. Because social traffic is generally less expensive, this approach makes it easier to generate a profit.
Native to Search: Obtain inexpensive traffic from a native advertising platform and send it to a search results page.
Four Key Strategies for Internet Marketing Success
Here are the top-4 strategies to make maximum ROI:
1. Choose Your Niche Strategically
Select a niche that balances market demand, competition, and your expertise and interests. Focus on areas where you can effectively target your audience and stand out from competitors. Conduct thorough research to identify niche opportunities that align with your skills and passions.
2. Budget Wisely
Set clear objectives and distribute your budget across testing, advertising, content creation, and marketing tools. Monitor your spending closely and track each campaign’s performance. Adjust your budget allocation based on the results and your evolving goals, hypotheses, and projections.
3. A/B Test and Analyze Continuously
Use A/B testing to experiment with different elements of your campaigns, such as ad copy, visuals, and landing page design. Analyze the results to determine what resonates best with your audience and drives the highest engagement and conversions. Utilize analytical tools to track key metrics and understand audience behavior. Continuously refine and optimize your strategies based on these data-driven insights.
4. Track and Optimize
Tracking and optimizing digital marketing campaigns is crucial for businesses to evaluate performance, allocate resources effectively, and understand audience behavior. You can maximize ROI and maintain a competitive edge by monitoring key metrics and refining strategies based on data-driven insights.
There are special ad tracking tools made just for that. For example, Keitaro Tracker helps monitor your campaigns in real-time.
Keitaro can help:
Track Clicks and Conversions
Monitor each click on your ads and track conversions to understand which ads drive traffic and sales.
Analyze and Target the Right Audience
Keitaro provides high-performance reports with 30+ built-in metrics and over 500 ready-made CPA and advertising network templates to gather comprehensive data on clicks and conversions. With customizable Geo DB, A/B tests, and multi-offer funnels, you can optimize your campaigns to increase conversions and minimize wasted ad spend. Use this information to refine your targeting strategies and ensure your ads resonate with the right customers.
Protect Against Fraudulent Clicks
Keitaro Tracker includes features to detect and block fraudulent clicks, safeguarding your budget from click fraud and ensuring your ad spend is used effectively.
By implementing these strategies and leveraging tools like Keitaro Tracker, digital marketers can optimize, control, manage, and protect their advertising campaigns, resulting in maximum profit.
