How Advertisers Lose Billions A Year Through Click Fraud

How Advertisers Lose Billions A Year Through Click Fraud

It’s no secret that thousands of businesses from all over the world use paid adverts and marketing to promote their services. Yet little do these businesses know, there are thousands of fraudsters out there trying to disrupt and destroy their paid ad campaigns.

With click fraud becoming an increasingly significantr problem every year, it’s important that every business understands the dangers of click fraud and how to protect themselves.

So what is click fraud and why is it such a danger to paid ads? To make sure you’re up to date with the latest PPC news, we’re taking a detailed look at what click fraud is.

Understanding Click Fraud


To understand click fraud, you first need to understand how paid ads work. Many paid ad models such as pay per click marketing charge the advertiser a fee every time a visitor clicks an ad. The PPC network who run the exchange receives this payment as profit in exchange for providing the advertiser with visitors. As you can imagine, the more clicks an advert gets, the more money the advertiser have to pay to the exchange.

With adverts ranging from a few cent per click to hundreds of dollars, some companies can literally spend millions a day on paid ads. However, with so much money being spent on ads, it’s only natural that not all of those clicks are genuine. Sometimes ad campaigns experience fraudulent clicks from robots and other people. Ranging from competitors, to criminal gangs, and even unhappy customers, these fraudulent clicks are what cost businesses billions every year.

These fraudulent clicks can be split into various categories depending on where they originate from. Each one of these categories have a different incentive for clicking on the ad, but most of them are to do with wasting an advertisers budget. By wasting an advertisers budget, they can quickly increase a decrease a businesses ROI and increase their cost per sale. Some fraudsters do this for so long that certain advertisers will stop running their ads because they deem them not profitable. For people in the same industry running the same ads, this is good news.

Affected Industries


Now you understand what click fraud is and how it costs businesses money, which industries are the most affected?

It’s no surprise that click fraud takes place in almost every industry, but some industries get a lot more of it than others. Usually the higher the cost per click of an industry, the more subject they are to click fraud. The means industries such as finance, insurance and banking often receive the most fraudulent clicks. Due to the cost of ads in these industries costing upwards of $100 dollars, it’s no surprise competitors are doing everything they can to get an advantage over each other. Even if this means clicking competitors ads.

On the other side of the spectrum, the industries with the least amount of click fraud are industries such as education and information. These are websites such as Wikipedia and Quora which don’t necessarily run paid ads, but the ones they do they pay very little. With prices being so low and having almost no competition, there isn’t really an incentive for anyone to click their ads.

What PPC Networks Are Doing To Help


With the level of click fraud continually on the rise, many advertisers are looking to the networks to see what they are doing to stop it. One of the biggest online paid networks Google AdWords, has recently set up its own traffic quality center to check that clicks on ads are actually genuine. However, as good as it might sound, it’s far from perfect.

The algorithm only checks the IP address of users and is nowhere near as sophisticated as it sounds. Due to this, the results are often poor and can easily result in users clicking several times when in reality, they should be blocked. This lack of click fraud prevention has lead to the rise of many 3rd party click fraud detection programs that independently protect customers ads from fraudsters. By not being affiliated with Google or the advertiser, they can offer unbiased advice on if a click was fraudulent or not. If I click was determined to be fraudulent then they will automatically request a refund directly from Google without users having to lift a finger.

One of these 3rd party programs PPC Protect, takes Google’s protection to the next level and actively monitors suspicious behaviour of users. By combining IP blacklisting and the real-time monitoring of ads, the software can automatically determine when a campaign is under attack and act accordingly. This means blocking certain IPs from seeing an ad while

With click fraud being one of the biggest threats to online advertisers, making sure you understand what it is and how it can affect you is crucial. If you currently run paid ads then wary of the click you are receiving. Without any click fraud protection, you could be wasting your budget without even knowing.