One of the most onerous problems with PPC campaigns is click fraud. Click fraud happens when a person, group of people, or automated script “clicks” on PPC advertisements. Because the concept of PPC is that advertisers pay each time someone clicks on their ads, this drives the cost of ads higher and higher without resulting in any conversions.

Click Fraud is becoming an increasingly difficult problem with PPC advertising. Don’t fall victim to the lure of participating in some click fraud scheme to increase your clickthrough rates. The results will be disastrous. Click fraud is a crime. Just as you should avoid being victimized, you should avoid taking part in falsely inflating the number of click-throughs on PPC ads either for personal gain or simply as a way to harm competition.

Click fraud happens for many reasons, the most common being that a competitor is trying to drive competition out of the market. By arranging for a competitor’s ads to be clicked on repeatedly without any intention of making a purchase or completing whatever goal conversion the competitor has established, the overall cost of the advertisement can be inflated, while the average conversions and the value per visit are deflated.

Click fraud can be conducted in several ways. Competitors may click through your ads repeatedly to increase the number of click-throughs for which you are charged. Some advertisers have been billed for more than $100,000 in PPC costs because a competitor has arranged to have their PPC ads clicked repeatedly.

In an effort to insulate themselves from criminal charges and to create as much havoc as possible, some advertisers will employ clickbots, or programs that search for and click on PPC links to drive up prices. These clickbots are usually automated and very often can’t be traced back to their “owners.” Click fraud is also conducted by a program called Paid-to-Read (PTR). Underhanded businesses hire readers to read and click through PPC ads. Again, this can be costly, but even more worrisome is the fact that PTR schemes are difficult to track because multiple people using valid IP addresses are clicking through the ads. It’s much harder to track multiple individuals than to track a single individual using some repetitive activity or clickbots to commit click fraud.

Some advertisers also believe that PPC providers commit (or encourage) click fraud because they benefit from the additional clicks. In fact, there have been several court cases that resulted in settlements when PPC providers like Google and Yahoo! were sued for contributing to or allowing click fraud to happen.

One of the most frustrating aspects of click fraud is that unless all the clicks come from the same IP address, it’s hard to prove that click fraud is actually happening. Some criminals have created programs, called click bots that can create clicks from what appear to be different IP addresses. In other cases, people are paid to read and click advertisements. In some cases, there are indicators of click fraud: an inflated number of clicks without conversions, clicks that all occur from the same computer or even the same city, and a large number of clicks within a short period of time, especially if the pattern of clicks is unusual.

Click fraud is monitored by watching the sources of PPC traffic. If a large number of clicks come from the same IP address, it’s obvious that fraud is being committed. Often, though, this isn’t the way it happens. Criminals use IP alternating software programs to click on ads. These clicks appear to come from legitimate site users.

Another indication of click fraud is if a number of ad clicks also seem to come from the same time frame (for example, 100 clicks over the course of 10 minutes). Monitoring traffic patterns is one way that anyone committing PPC may be caught.

If you suspect that you’re being targeted by click fraud, immediately contact the fraud department of your PPC provider. And if you don’t receive satisfactory results from reporting the activity, you should consider pursuing legal action. Click fraud can cost your company thousands, even tens of thousands of dollars. Worse, click fraud can destroy your PPC advertising campaign. Monitor your stats closely for any signs that you may be falling victim to click fraud.

In the past, anyone caught conducting click fraud schemes would receive what equaled a slap on the wrist. Today, however, many search engines are being made to answer for click fraud and the costs that PPC users have to pay because of it, so those search engines are cracking down. If you get caught conducting a click-fraud scheme, you could face stout fines, and possibly even a criminal prosecution that could result in jail time.

Click fraud is a serious crime. Don’t be victimized and don’t be tempted to do it yourself.

Tags: Click Fraud, Click Through Rate, Clickthroughs, CTR, Pay Per Click Advertising, PPC, PPC Tips, Search Engine Optimization, SEO, SEO Tips

This entry was posted on Friday, June 18th, 2010 at 11:51 am and is filed under Search Engine Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.