How are people making a profit

I don't think they are bidding anything near Bing's suggested bid.

Anyone who does that is likely not making a profit

an offer I want pays $3 on a double optin. The keyword I want to bid suggests $0.28 and has 904 clicks with 5000 seaches a month

But looking at semrush, seems that ads are paying around 50 cents

Hi, GreyHatSam

First of all, no one knows if they are making a profit. There are many people who don't know what they're doing and losing money.

Second, don't be intimidated by these numbers. Start with lower bids like 0.3 and see what happens. All that matters is how your ads do. Maybe with a cpc of around 0.20 and a high conversion rate you can make a profit even out of a $2.5 offer.

Never base your strategy around what others are doing. Stay in your own lane and focus on your metrics. Its the only way to get and stay successful.

Semrush doesn't know what other people are paying and don't know what you would be paying. You have to take any stats like that with a huge grain of salt. Even Bing's suggested bid does not tell you what a specific advertiser is paying or what you would pay. There are too many factors involved.

You also don't know the payout other people are getting. Just because it is the same offer or on the same network doesn't mean you have the same payout as they do. And you don't know the rest of the story of what each advertising is doing with their data and leads. If they have been advertising long-term then they certainly are making a profit one way or another or they would not continue advertising.

You have to test for yourself, optimize all aspects of your advertising, and see if you personally can make a profit or not. You may be competing for the same keywords and the same customers for the same offers, but the playing field is never level because there are so many other factors.