Click fraud is a form of fraud that can affect pay-per-click (PPC) advertising. It refers to the practice of repeatedly clicking on an ad that is hosted on a website for the purpose of gaining more revenue for the host site, or for stealing revenue from a competitor. It is an illegal practice that has serious repercussions. In this article, we provide an in-depth analysis of click fraud and its implications.
Thanks to the Internet, marketing efforts have been revolutionized over the last two decades. Online marketing has completely changed the way that businesses reach their customers. In fact, online advertising is so powerful that it has become the preferred form of marketing, and more traditional methods of advertising are starting to disappear.
It’s easy to understand why online advertising is so popular. It makes it possible for businesses to reach more customers, it’s much less expensive than traditional advertising, and it also allows companies to really target key demographics. Add to all of this the fact that online marketing can be closely monitored, and it’s no wonder why it has become so popular. There are many different types of online marketing, but the most effective form is, hands down, pay-per-click advertising.
Pay-per click (PPC) advertising is a form of Internet marketing in which advertisers make an arrangement with website owners. Basically, the advertisers post their ads on a website, and they the owner a certain amount every time a visitor to that site clicks on the advertisement. Once someone clicks on the advertisement, they are brought a specific destination, such as the advertiser’s website. Essentially, pay per click marketing is a way for businesses to buy visits to their site instead of earning visits organically.
Pay per click marketing is used by tons of search engines, businesses and website owners. In theory, it seems like the perfect arrangement, because all parties involved benefit, and when it is done properly, it really does benefit everyone involved.
Unfortunately, people are taking advantage of pay per click advertising and have developed ways to take advantage of it for their own monetary gains. In the simplest of terms, click fraud is a way of generating false clicks on pay per click advertisements. This fraud can either be done manually by click farms, or it can be done by online bots and automated software.
Click fraud impacts pay per click advertising because it creates a false price hike on search terms. It also affects display ad impressions because advertisers believe that they are receiving a higher amount of click-through rates than they really are.
Imagine that you paid for billboard advertising for your business. Now, imagine if someone were to tear down all of those billboards… If your billboards are torn down, people aren’t going to be able to find out about your business, so you invest in more billboards, which of course, cost you more money. This analogy is essentially how click fraud for pay per click advertising works.
But why would someone tear down your billboards, or commit click fraud? Some of the most common reasons include:
When someone wants to eliminate or harm their competition, they might target a competitor’s ads and click on them to generate false clicks. These clicks end up inflating the competition’s cost of advertising, as they end up having to pay for fraudulent clicks. If their marketing budget is depleted, they have less to invest in other ads. Thus, the competition is eliminated, and the party that committed the click fraud can get more business.
There are several ways that click fraud can be committed. Some of the most common methods include the following:
There’s really no way to determine exact estimates of click fraud, as a lot of this fraud is completely undetected. However, in 2017 alone, it is believed that 1 in 5 clicks on pay per click advertising were fraudulent, and experts believe that the number rises every month.
In order to identify click fraud, several technologies have been developed to detect it. There is a pretty much guaranteed way to tell if click fraud is occurring without the use of technology: if a site’s click through rate is near 100 percent, but has few impressions, odds are that click fraud is occurring.
There are several ways advertisers and publishers can protect themselves from click fraud. Some effective protective measures include: