Click Fraud - The #1 problem of PPC Ads

Click Fraud is by far the most serious problem that the Internet Advertising industry is currently facing. It is next to impossible to prevent or cancel click fraud. We can not stop it from happening but we can, to some extent, control its consequences. Only through constant monitering of the click activity and being on watch constantly, can an advertiser or publisher combat the click fraud and reduce the damage caused.

Now, let's examine what Click Fraud is all about:

What Is Click Fraud?

Click fraud is an illegal activity of clicking internet ads and generating false clicks on PPC ads, that have no chance of conversion, with the intention of profiting from such clicks or to inflate advertiser costs or whatevr may be the reason. This is akin to stealing money from advertisers because they are the ones who has to pay for such clicks.

The main reasons why click fraud can occur are:

• The intention to inflate the advertising costs of a competitor, their by hurting their business.
• The intention to make money (though illegally) from Adsense or such Pay-Per-Click programs, or to increse their CTR and other such selfish motives.
• Extortion - when hackers create software that perform fraudulent clicks and use it to threaten various companies in order to obtain money;
• Jealosy - To hurt publishers (by getting them banned) who are making good money from PPC programs.
• Vengeance - By enemies of the company and people who are not happy with a company like fired employees etc.

How Is It Done?

• Manual clicks - By repetedly clicking on ads manually either because of an offered incentive or personal motive.
• Automated methods: Software applications designed to click on paid ads. Some of these use clever algorithms to determine click behaviours, reaching the performance level of simulating genuine human visitor behavior. Because of ability to destroy all identifying referneces and rotating IPs, Geos etc, the activity from these programs is very hard to detect.

The overall awareness about Click fraud grew significantly among Webmasters and advertisers and they have also become more knowledgeable of the methods used in click fraud and have come to easily detect simple fraudulent click activity.

According to one theory, there has been no real interest from the part of the major search networks that participate in the system, for this puts them at a loss: on one hand, admitting it means making refunds to advertisers, on the other hand fighting it means significantly reducing their gains also. As fraud costs advertisers more and more, the problem has increased in acuity more and more and the big players just have to do something to defend their clients and keep them satisfied with the results they get from advertising programs, as they are the revenue source for many.

How is Google combating Click Fraud?

Google is taking active part in detecting and combating Click fraud as this is important to keep the advertisers happy. Their AdWords program is reportedly generating around 95% of its revenue, and the success of the programs rests on providing a profitable ROI for its advertisers.

The truth is that the battle is still mostly led privately. One just has to keep his eyes wide open and be the watchdog of the way his or her advertising activity performs. This constitutes an inconvenient for many advertisers as well as for publishers, who think their job would be to ensure quality content for their sites and not waste time sniffing around and keeping their eyes on the stats, thinking it's Googles job to ensure click safety.

They have taken steps in the direction of protecting advertisers, it has a quite complex monitoring system (analyzing a multitude of parameters beyond CTR) that uses both engineering systems and human analysis and they are on continuous activity of upgrading their detection mechanisms to combat fraudulent activity. Last year, they have also improved their smart pricing system, so as to charge the advertiser in accordance with the analysis of the probability of a click converting or not.

Once an invalid activity tracked this is what Google does:

• Advertisers are not charged for clicks or impressions that were identified as fraudulent. Or refunds are made if the case.
• Publishers are not judged starting from the assumption of innocence and are severely penalized without much debate: AdSense™ account dismantled. They give no guarantee for the possibility of account reinstatement although they state their opening for discussion, considering the possibility of sabotage.

How Publishers are affected with Click Fraud?

In is a common opinion that when Click Fraud is detected the publisher is seens as the 'bad guy' (even though this is not always the case). This is because he can directly benefit from such activity. For publisher, more clicks means more revenue. Because of this, Publisher is usually the first suspect.

When click fraud is detected, Google can potentially ban an account of the publisher. This is by far the greatest contributor of Google Adsense bans. So naturally, honest publishers as dreaded as the advertisers of the Click Fraud.