Ad arbitrage is the process of buying and selling ad impressions on adexchanges with a margin.
With programmatic buying and RTB, a single impression is bought and sold in less than a tenth of a second.
Using their own access to an adexchange ad arbitragers are looking for underpriced ads and resell them on the same adexchange or on another one. They play with market imperfections.
Ad arbitragers may benefit from privileged access to bids, poor connections between exchanges and agencies or lack of connections between adexchanges.
In some cases, ad arbitrage may be fraudulent. This happens when an ad spot is bought through an ad exchange and stuffed with many hidden ads which are all resold individually. See ad stuffing for more details about fraudulent ad arbitrage.