Is Click Fraud Really A Problem?

If you use pay per click advertising for your marketing campaigns, then you should be aware of a new threat that’s plaguing the industry. Known as click fraud, this fraudulent activity is affecting businesses from all over the world and costing them billions.

With online marketing generating billions of dollars in revenue for both advertisers and publishers, it was only a matter of time until somebody started to abuse the system.

This fraudulent abuse of pay per click advertising costs companies billions of dollars a year and almost no one is immune from it. No matter if you’re a small business running 2 campaigns or a huge business running thousands, everyone is a victim to click fraud.

But what exactly is click fraud and why do people do it? Here’s everything you need to know about this new online threat.

What Is Click Fraud?

click fraud alert

Click fraud, simply put, is the act of fraudulent clicking pay per click ads when the user has no intention of ever buying. In fact, most of the time these fraudulent clicks will be from competitors who are also running a pay per click campaign on the same keyword.

By clicking on a competitor’s ad, the other company will be forced to pay for the click whether they make a sale or not. By repeatedly clicking on someone’s ads competitors can rack up huge costs for advertisers and cause them lots of problems. From financial loss, to having a competitive advantage, here are the main reasons why people do it.

Why People Fraudulently Click Ads

There are numerous reasons why people participate in click fraud, and they can be grouped into 2 main categories, advertisers, and publishers. If you’ve ever experienced fraudulent clicks in the past then the chances are it was down to one of these groups.

Advertisers

advertising fraud

Since the pay per click industry is very competitive, it’s only natural that advertisers try to sabotage their competition by fraudulently clicking on their ads. Most companies will do anything to give themselves a competitive advantage, even if it involves committing fraud.

Not only does this mess with their competitor’s advertising statistics, but it also makes them pay for visits from people who never had any intention of buying from them.

This causes competitors pay per click budgets to run out faster and stops genuine visitors from visiting their website. Not only does this make the company waste large sums of money on fraudulent clicks but it also increases the average cost to capture a lead.

These might sound like dirty tricks, but when it’s the difference between a visitor visiting your website or your competitors, many companies will do whatever it takes to steal visitors.

Currently, fraudulent clicks from a competitor are one of the most common forms of click fraud. No matter how big or small a business may be, the chances are they’ve had competitors clicking on their PPC ads.

Publishers

publisher click fraud

However, it’s not just competitors that are to blame.

In pay per click marketing, every time a user clicks an advert the publisher gets paid for displaying the advert on their website. For many websites, this is their primary source of income, and they rely on users to click their ads.

Some website owners encourage users to click on these ads multiple times to “support the website”. Of course, this is entirely against the terms and conditions of many pay per click networks such as Google Adwords, but that doesn’t stop people from doing it!

An easier way for the website owner to make more money is just to click the adverts themselves to increase their ad revenue. Just like competitors clicking on the ads, none of these visitors has any intention of buying and the money is wasted.

This is why advertisers who run PPC campaigns on the Google Display Network often experience much higher levels of fraud. Not only are competitors trying to click your ads, but so are the webmasters who own the site!

In the past, there have been various organised crime discoveries including the famous MethBot which reportedly cost advertisers as much as $3 million per day in lost revenues. With over 3 million 3rd party publishing websites, if you run Google display ads then you massively increase your chances of receiving fraud.

Click Fraud Techniques

So how do these fraudulent clicks happen in the first place? Surely it can’t be people sat there clicking ads all day?

Well, you’d be surprised…

Manual Clicks

The first and easiest way for companies to engage in click fraud is to just Google their competitors and click their ads every day. This might be a low-tech method, but it definitely gets the job done. Some companies have even been accused of encouraging their employees to click competitors ads as many times as possible.

Manual clicking might be a simple and dirty way to cost your competitors some money, but the professionals do it at a much larger scale.

Bots and Malware

how click fraud affects you

The second technique many people use is in the form of robots and malware. Instead of paying someone to click the same ad over and over again, it’s a lot cheaper to get a robot to do it. Not only do they do it for free but they can click hundreds if not thousands of them simultaneously.

In the past, there have been several discoveries of fraudulent bots being made for the sole purpose of clicking ads. Not only do these bots cost businesses billions, but some can even put companies off running ads forever.

The last method is by far the most cunning. Some people will go to such extreme lengths that they will actually use other people’s computers, without them knowing, to click ads. By installing malware on other people’s computers, these individuals can force people to click ads and rack up bills for their competitors or ad revenue for themselves.

Know as a botnet, there have been plenty of discoveries in the past of criminals using these schemes to make millions. Not only do the clicks look more legit but they can be incredibly hard to stop.

How Can You Stop It?

Now we’ve covered the underground world of click fraud and the damage it could be doing to your business, how exactly can you fight back?

Stopping click fraud is no easy task. You have to constantly be on the lookout for new IPs clicking your ads over and over again. This means you need to spend a fair amount of time checking your server’s logs. Since AdWords don’t give away any identifiable information in their software, it’s recommended that you install a 3rd party tracker. With the tracker, you can log everyone who clicks your ads and review their data after. If they do happen to be a user that has repeatedly clicked on your ads then you can also add them to your AdWords exclusion list. This stops them from seeing your ads in the future and saves you a lot of money.

To learn more about click fraud and how to protect yourself, we suggest you have a read of our What Is Click Fraud guide. Not only does it go into much more depth behind what click fraud is and how it affects businesses, but its also packed full of other useful information. If you have a spare 10 minutes then we definitely suggest you give it a read. However, if you don’t have the time to be dealing with click fraud then don’t worry, we have the perfect solution.

Here at PPC Protect, we have all the tools you need to defend yourself from malicious bots and unethical competitors. With set up taking as little as 2 minutes it only takes a moment to reap the benefits of click fraud protection.

To find out how PPC Protect can protect your ads and save you money, click below to read more and try our free 30-day trial.