Also as a publisher, how can you buy traffic? We sell traffic. Unless you have means of buying cheap traffic and selling it at premium, I don't see how this can work.

It's a very popular monetization strategy called "traffic arbitrage" or "ad arbitrage". You'd be surprised justhow many websites do it and make a very nice profit from it. It's not easy. It takes a lot of....you guessed it...optimization and testing but very profitable when done right.

I have seen this described, but mostly to do with spam/blackhat sites. For example sites that offer pirated tv shows and movies using traffic "brokers" like taboola to then direct the users to sites showing Adsense ads. But clearly this strategy involves illegal activities.

Is there a legitimate means of doing this so called arbitrage?

Am I seeing this right or am I missing something. I am assuming that taboola and other similar services are priced similarly to Adwords / BingAds.

Pricing varies wildly depending on a whole bunch of stuff. I was using AdWords to drive traffic to a few of my sites when they were new, and typically paying around $.03 to $.05 per click. But I wasn't trying to buy AdSense performance as much as name recognition, and I also don't know if I could get those clicks that cheaply nowadays. Probably, but I'm not sure. I'm pretty good at PPC. I made more money than I spent, but that wasn't the goal, I looked at it as startup marketing costs.

Is there a legitimate means of doing this so called arbitrage?

Depends on what you consider to be legitimate. Can you find targeted traffic that is #1 interested in your content and engaging with it and #2 attractive to your typical advertisers? That would be perfectly legitimate, but it's not easy to do.

Is there a legitimate means of doing this so called arbitrage?

Absolutely! Google's T&S allows buying traffic for AdSense publishers. It's as simple as that. I even personally know a handful of premium publishers who did it and their Google reps. are aware.

There are often ads on facebook of the 'you wont believe what happens next' type, that take you to a page with lots of adsense and also more of the ´you wont believe...´ type ads.
I dont know how they avoid an adsense ban, but it must be possible to buy facebook ads cheaply enough that the arbitrage works.
I have also seen adsense ads that take you to a page with a popup window giving a premium rate phone number you can call for more info, and if you close the popup you get a page completly covered with adsense ads. Again, dont know how they avoid a ban but this particular ad has been running for years.
So arbitrage is possible, and presumably very profitable, but the risks seem high.

Arbitrage iswhat SEO was like 7-8 years ago. A lot of easy money to be made for those that understand how the model works and can walk the gray line successfully.
Sure, Google, Facebook and other giants might decide to make the gray lne a little darker and clearer in the short to medium future but if you look at the way SEO has developed, that might be a good thing.
With clearer defined lines on what's ok and what isn't you can more easily scale your operations w/out fear of losing your AdSense account.

The same can be said of advertisers but how will you ever know if you can achieve a better ROI if you don't try first?

It isn't about a better ROI per se, it's about beating the ROI that one can earn from other investments of time.

If AdSense is icing on your cake in revenue terms, it makes more sense to focus on the cake, not on the icing.

I find that ignoring the suggestions works best, and I occasionally do the opposite. Why? Because I've noticed that increasing my CTR by just 1% leads to a large tumble in EPC. That tells me the goal is to use as few units as possible and to put them in positions that will get clicks. Adding that extra unit elsewhere dilutes the potential EPC, and adsense is all about the EPC given how little they pay in comparison per impression.

Less is most definitely more with this program, even if the suggestions say more, more, more.

Tip: You can change the color of your arrows by selecting a color other than your default text color for the 'url' setting. I know some people like to make the url look like text by using text colors on them but doing so turns the arrow that color as well, regardless of what you set.

I find that ignoring the suggestions works best, and I occasionally do the opposite. Why? Because I've noticed that increasing my CTR by just 1% leads to a large tumble in EPC. That tells me the goal is to use as few units as possible and to put them in positions that will get clicks. Adding that extra unit elsewhere dilutes the potential EPC, and adsense is all about the EPC given how little they pay in comparison per impression.

Agreed....mostly. CTR is still important but you don't want to get it too high and appear on G's radar. Best thing is to optimize for revenue per session (RPM * pages per session), which would also calculate for improved CTR but not in a way that hurts your users' experience. That balance is what G is looking for.

So what is peek ?

1/5, 1/3, or 1/2 ?