According to an article published in the New York Times, click fraud operators can cost as much as $6.3 billion in lost advertisement revenue. That report was published in 2014. More than 5 years later, the revenue loss caused directly due to click fraud should be much more.
Before we explain the intricacies of click fraud, it’s important to understand the ideal scenario. When a business pays for pay-per-click advertising, it pays a fixed amount per click. These clicks ideally should be organic and from users who are genuinely interested in the service or product showcased in the ad.
Now, because the business pays per click, the amount of money they spend usually translates to a ballpark number of queries and in turn business. However, what’s stopping anyone from clicking on the ads with the sole intention of draining the advertising revenue of a company? Competitors and advertising networks can engage in click fraud. The targeted business would see plenty of clicks on their ads but no real conversion.
What is Click Fraud?
Back in the day, click fraud was pretty primitive. Fraudsters used to click the ads manually using different computers or ask family and friends to click on a particular ad. This is why the percentage of click fraud, when compared to the total number of clicks an online ad received, was pretty low in the early days of click fraud. Now the fraudsters use bots to register fraudulent clicks, which has made the entire process much more efficient. These bots are programed to register clicks and quickly drain the advertising budget without generating any positive returns.
Who Would do Click Fraud?
Why would anyone click on your ads without having anything to gain in return? Well, there are more than a few people who can gain from click fraud. The following are a few of them.
Competitors: Your local competition may decide to engage in click fraud to deplete your marketing budget. This below-the-belt move is adopted by many unethical businesses to derail the marketing efforts of their direct competitors.
Sites that Host the Ads: Sites that host the ads by going into a revenue sharing partnership with Google AdWords and other ad networks get paid per click. This means they get paid more if the ads on their site get more clicks. It’s easy to see why some of them fraudulently register clicks on the ads placed on their own sites.
Fraudulent Advertising Networks: Advertisement networks bill their clients at periodic intervals and the total bills for PPC ads depend on the total number of clicks. Unscrupulous advertising networks often hire click farms and click fraud networks to fraudulently inflate the invoices they send to their clients.
How to Prevent Click Fraud?
According to 2019 estimates, PPC advertisers are going to lose about 20% of their ad budgets to click fraud.
Thankfully, just like there are software and bots to perform click fraud there more than a few software packages used by the good guys for click fraud prevention.
Click fraud detection companies use machine learning technology to monitor every single click each ad receives. They then filter out the fraud clicks and separate it from the real clicks by real potential customers.
These companies use several data points such as average time spent on the landing page, mouse movement, whether the person clicking the link scrolled or not to detect bot behavior.
Once the fraudulent clicks are detected, the click fraud prevention companies can ask Google AdWords to stop showing the PPC ad to fraud IP addresses.
You can even detect the fraudulent IP addresses yourself, but the process is time consuming and not as effective.
You can check click timestamp and action timestamp data to detect the IP addresses that came to your site only to bounce after a few seconds without performing any action. There is a high chance that you are a victim of click fraud if your site received tons of clicks but no action timestamps. If you detect click fraud report the IP address to Google. Create a list of suspicious IP addresses and block them by contacting Google Ads.
A lot of times click fraud IP addresses belong to a particular geographical region. These locations may have a different language and you might not even offer your product or service to people living in these areas. Therefore, there is little to no reason for people to be interested in the ads. Tweak your ad settings to block the entire geographical region. This only applies to regions that cannot possibly generate good traffic that can convert to sales.