What is Click Fraud?

Business owners who advertise with pay per click advertising (PPC) must stay constantly vigilant of click fraud, an internet scheme which can quickly deplete your advertising budget. Also known as click spam, click fraud involves a false inflation of the number of clicks on an ad. Fraudulent clicks are any clicks on a pay per click ad that happened where the intention is not interest in the ad’s content, but to cause a charge to the advertiser. Often these false clicks are automated, but sometimes the clicks come from individuals (occasionally paid). Click fraud is criminal; however, this hasn’t stopped the proliferation of increasingly sophisticated click fraud schemes, and it can be a hard crime to prove and prosecute.

Click fraud occurs for many different reasons. Sometimes, the defrauder is acting innocently enough – they have heard that a friend or family member is paid by their advertisers for each click on ads on their website or blog, so they visit advertised links to help out that friend or relative without any intent to patronize. Other times, motivations are far more malicious. Competitors of advertisers might try to drain their rivals’ advertising budgets by constantly clicking their ads. Competitors of the websites publishing the pay per click ads may attempt to frame the webmaster (publisher) for the click fraud, causing the advertiser to pull their ads and the related revenue from the site because they think they are being defrauded by the webmaster. The most frequent perpetrators of click fraud, though, are publishers themselves, many of whom run successful pay per click scams.

Part of the problem is the format of pay per click advertising. Initially, pay per click advertising simply involved a webmaster publishing advertisement links on their websites in exchange for compensation for every click generated. Then the industry grew to support other networks of advertisers who became middlemen in the equation; they are often referred to as advertising programs, and include (but are definitely not limited to) Google and Yahoo! Search Marketing. These networks would receive the money per click from the advertiser, take a cut, and then pay the publisher (website owner). Click fraud scammers are able to easily advantage of this system. They simply sign up with these programs as advertisers, claiming that they will publish advertisements on their websites and increase the ad exposure. Obviously, no real ad exposure is planned; scammers throw the links up on traffic-less websites created specifically for the scam and then have hit bots or (very lowly) paid employees click away, billing the affiliate program for every fraudulent click.

Many of these advertising networks do what they can to prevent click fraud, but it is extremely difficult to determine which clicks are legitimate and which are not. Also, unless the fraud is perpetrated by a “scammy” publisher, the affiliate networks have little recourse when click fraud is discovered, and they usually have to bite the bullet and issue refunds to advertisers for the fraudulent clicks. Unfortunately, there are no foolproof techniques to stop click fraud.

Google and Yahoo Sponsored Search have addressed most of the concerns but click fraud still takes place on a daily basis. The only way to stop or avoid click fraud is to constantly monitor the traffic, spikes or suspicious activity.

If any SEO company promises you a certain amount of traffic from your PPC ads, be alert to the dangers of click fraud. Not only will you get no real business, but your PPC budget will be quickly drained.

If you think you are a victim of click fraud, contact us. We can help.

April 21, 2010

Written by Duran Inci

Duran Inci is a Digital Marketing Executive with over eleven years experience in e-business, including Content Marketing, Paid Search, Ecommerce Systems and Integrations. As Co-Founder and COO of Optimum7, Duran has developed sophisticated processes resulting in leading-edge execution of marketing strategies. Combined with his strong leadership of the Optimum7 team, Duran has successfully generated many millions of dollars in revenue for his clients. His strong analytical skills consistently result in businesses meeting and exceeding online business objectives. Duran has taught a Digital Marketing Bootcamp at Florida International University for the School of Journalism and Mass Communications. He also hosts workshops at South Florida Universities such as FIU (Florida International University), AIU (American Intercontinental University), UM (University of Miami) and various universities in Europe. He's also very active in the development of South Florida IT Cluster and planning. 

Duran has been a featured speaker at various SMX, eMetrics, eMarketing and SES Conferences.

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