As we saw in part II AdSense Arbitrage: Keyword Selection, finding the right set of circumstances where AdSense Arbitrage is going to work requires a bit of work. You’ve got to get a large enough set of related keywords, get some prices, and then compare and look for the right opportunity. If you read Rae’s blog then you might remember her post on Legitimate Use of Mechanical Grunts, which is a perfect for this situation. However after you get the keywords, and prices you’re still going to have to sift through all that data. I was talking with Scott (aka Web Professor) last week and he pointed me in the direction of Standard deviation.
Ok there is going to be a little math here, and it may look really scary and look like it’s going to make your head hurt. Trust me it’s OK we can get through this really. I hate reading those long boring overly complicated search engine patents just as much as you do, so I’ll keep things simple. The big formula is coming brace yourself …
Ok I promise I won’t do that again. The formula comes from Wikipedia, but since most spammers aren’t interested in this kind of stuff we’re going to assume it’s reasonably accurate. We’re going to work with a sample of 4 bids for illustrative purposes, however I’d suggest a I wider sample range once you actually get going.
Bid 1: $4.58
Bid 2: $4.53
Bid 3: $4.10
Bid 4: $4.05
We are going to get the mean of these numbers (add them together and divide them by 1 over amount of numbers)
(1/4) * ($4.58+$4.53+$4.10+$4.05)
(1/4) * (17.26)
we end up with 4.315
Explaning the next part in words is too complicated so I’ll just show you the formula that funny thing is a square root
√[ (1/4) * [(4.58-4.315)2 + (4.53-4.315)2 + (4.10-4.315)2 + (4.05-4.315)2]]
Inside of each of the parentheses we subtracted the mean from each of the individual numbers and squared the result.
√[ (1/4) * [(0.265)2 + (0.215)2 + (-0.215)2 + (-0.265)2]]
√[ (1/4) * [(0.070225) + (0.046225) + (0.046225) + (0.070225)]]
√[ (1/4) * [0.2329]]
√[ 0.058225 ]
The end result is 0.241 (rounded to three significant digits). OK great your head hurts and 37 people how now unsubscribed from my blog because they had high school math flashbacks, but what the heck to you do with that number? Well the lower that number is the worse the situation actually is, here an example of four other bid prices for an actual keyword:
Bid 1: $16.99
Bid 2: $16.98
Bid 3: $12.00
Bid 4: $10.00
You can see the bid gap is larger by looking at it, but remember were trying do this without having to look at the numbers. I’ll save you the trouble and tell you result is 3.065. So a higher standard deviation will clue you in to a possibly favorable condition. Now I’m not going to recommend you turn your scraper on full tilt and let it make your decisions, what I am saying is get a scraper/number-cruncher to help you identify the best possible candidates. Let the machine do the grunt work, save you time and energy, and you do the thinking and decide if it’s worth pursuing or not. It’s not rocket science, but with a little programming, a little math, and a little creativity you may find a new way to build your income.
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