What I’ve seen in practice is that you need CPMs to be extraordinarily high and CPCs ridiculously low to pull this off. And it seems that for this to be possible, you’d have to dilute the demographics advertisers are sold on when you buy the cheap traffic. So long term the CPM would drop (assuming honest ad sales teams and intelligent, optimizing advertisers), and the long term revenue would suffer.

Sorry but I don’t quite understand your financial reference. From my understanding of the markets, the more standardized a product is, the easier it is to package and sell. Many a ‘stock’ denominated in different currencies sounds almost like a bespoke product that could be traded over the counter? But interesting idea on being able to ‘lock in’ impression rates and costs.

I know of a couple of outfits that have attempted to do this – you are absolutely right. My own company discussed it already in 2004. I guess from my point of view question is whether volumes and demand in the market place (ever increasing supply of impressions) would allow for a more robust business model – maybe even mimicing a stock market trading system where site owners would be “stocks” and CPC, CPM and CPA simple currencies in which stocks would be denominated. I know of no company that successfully has packaged derivates e.g. a forward of impressions etc.

I was wonderinf how did you arrive at this figure? Also, the arbitrage that you speak of has been going on for a few years now. Try searching for MFA (Made for Adsense) sites and you can see a lot of documentation leading back to 2006. My understanding of such arb is that it’s getting harder and harder to execute such a biz model due to Google’s QS affecting affiliate/low content sites.

On a large evolving market where the internet is new and fast growing but the market is still immature the oppurtunity is really huge for a player with finacial means and experience. However on the more mature markets the phenomenon internet brokers is present and the technical tools are sharp with split second updates for traders/brokers/publsihers (real media exchange platform for instance). But still a player with data, tracrecords, sharp technical tools, experience and great knowledge has the edge…