7 Ways to Stop & Prevent Click Fraud - A Special Report

What is click fraud?
Click fraud is the practice of clicking on a pay per click ad without any intention of buying the advertiser’s product or other desired action. Advertisers are the victims because they pay for clicks that don’t convert.

Who is committing click fraud & why?
People or groups now termed “fraudsters” that are trying to 1) generate revenue and profit for themselves or 2) hurt a competitor by depleting their ad budget and improving their own ad position. Some click fraud is perpetrated by individual fraudsters and is minor in nature and some that is more complex is performed by organized crime.
Click fraud is part of a larger category of “Invalid Clicks”. Invalid clicks are all the clicks that advertisers should not be paying for. They include non-malicious clicks that are also contributing to low quality clicks that eat up advertiser budgets quickly. Invalid clicks include clicks from spiders that crawl the web and click on every link to index sites, human or bot clicks used in testing of ad campaigns, clicks coming from outside geo-targeted regions and many other types of unwanted clicks. This brief focuses on click fraud but you should be aware that there are many other types of unwanted invalid clicks that can deplete your ad budget and we’ll be focusing on those in a subsequent paper.

What types of Click Fraud exist?
There are two primary types of click fraud:
Publisher Click Fraud: Publishers who join the search and content networks get ads placed on their sites. Every time someone clicks on an ad on their site, they share in the revenue the advertiser pays for the click. If a publisher owns many sites with many ads and generates lots of traffic to those sites, the revenue they receive from the advertisers can be substantial.
Competitor Click Fraud: When you bid on a keyword, you specify how much you are willing to pay per click and how much you are willing to pay per day – your ad budget. Competitors are motivated to click on the ads listed in more prominent positions to deplete their ad budgets, improve their own ad position and put a little hurt on their competitors – all at the same time.

Why Is Click Fraud Getting Worse, Not Better?
Every type of online threat has shown the same trajectory – start simple but if there is a way to make money from it, then complexity seems to know no bounds. Viruses, worms, spam, and phishing all evolved and eventually became so sophisticated that people could not stop them by themselves – they needed to enlist the help of products specifically designed to stop the threats.
Click Fraud is showing the same history. New technologies and techniques are being used by organized crime to rake in the money available from unsuspecting advertisers. The two primary techniques used are Clickbots and Clickfarms.
Clickbots are bots (robot programs) that are programmed to click on ads. Many of the viruses that spread across the Internet deposit clickbots on innocent victim’s machines. They end up forming botnets (networks of bots) that can be conscripted into service by an evil hacker. Imagine a network of a million machines infected with the same clickbot – receiving instructions to click on an ad every few minutes. If clicking on the ad makes the evil hacker money, then employing a botnet can make the hacker a lot of money and conversely, can cost advertisers millions in wasted ad spend.
A Clickfarm is the term used for a group of people who are conscripted into the shady world of click fraud. You may have noticed craigslist ads soliciting people to click on ads in their spare time. Clickfarms are often staffed by people in foreign countries with depressed economies that receive a few pennies per click to click on ads. Click on enough ads and that income becomes a reasonable alternative to other work in many parts of the world. There is much more on the subject of how click fraud is performed but suffice it to say that it is on the rise to the tune of 16.2% of clicks in Q3, 2007 representing nearly $1B in charges. Check the Click Fraud Index for more information.