Was reading a post earlier today over at JohnChow.com.

Apparently he is getting an effective $27 CPM on his blog.

Anyone who builds advertising-based sites knows that this number is absolutely freakin insane!

Back in the dot-com days, sites like Wired and NYTimes were really killing it when they made $20 CPMs. The little guys were killing it when we made $5-10 CPMs.

John has a decent blog… but is it that good?

One theory I have is that his blog, and blogs like Shoemoney, ProBlogger, etc, that are all geared towards making money online, are using Alexa Arbitrage to make more from sites like ReviewMe, Text-Link-Ads, etc. which (perhaps mistakenly) place way too much emphasis on Alexa rankings.

What percentage of readers of these blogs have either the Alexa Toolbar or the Firefox SearchStatus plugin installed? (both report data back to Alexa for the rankings)

I would guess the percentage to be quite high.. 25%… 30%… 50% or more?

JohnChow.com pulled in $8k+ in March on only around 300,000 visitors or so, with an Alexa ranking hovering around 3,000.

I have a site, which does not focus on webmasters at all, that gets about 30-40% more traffic than that, yet it’s Alexa ranking is 30,000+ and CPMs are more in the $3-5 range.

Clearly, having an influential blog frequented by webmasters, SEO and money-making types is A LOT more profitable on a per-visitor basis.

IMHO, this is caused in no small part by Alexa Arbitrage.

How to Profit from Alexa Arbitrage

Simply setup a network of sites that specifically cater to the following class of individuals:

• SEOs
• People wanting to make money online
• Internet Marketers
• Bloggers & people who want to monetize their blog
• Advertisers - many of whom probably have the toolbar installed themselves
• Web Stats / Industry Junkies
• Alexa junkies (i.e. blog about Movers & Shakers and cool API implementations like Alexaholic/Statsaholic)
• etc

If my theory holds true, your CPMs will be off the charts relative to other industries.

Post inspired by Warren Buffet’s Advice to SEOs (Or, Why Your Business Model Is Working Against You). I’ll try to write more up on this later. I recently registered the domain IncomeHacks.com, which I’d like to turn into a Lifehacker for making money online type of blog.