How Does Ad Fraud Affect Clicks?

In the early 2000s, pay per click (PPC) or CPC (cost per click) became the standard for online advertising. Advertisers looking to get their brands in front of online customers used PPC to place their ads on search engines, on websites, and even on social media posts.

For brands looking to grow their online exposure and boost revenue, PPC still remains a solid tactic today. Unfortunately, over the years it’s also become a target for fraudsters looking to make a quick buck.

To understand how ad fraud affects clicks, let’s start at the beginning.

Source: Custom Fit Online

How Does Pay Per Click Advertising Work?

PPC advertising is a digital advertising model where advertisers display ads that are relevant to search queries. For example, let’s say you search for snow boots: several PPC ads for snow boots appear.

Here, each time their ad is clicked, an advertiser will pay a publisher. If a publisher is charging $0.20 per click and your PPC ad generates 70 clicks, now you pay the advertiser $14 ($0.20 x 70). Not too bad, right?

How Does Ad Fraud Affect Pay Per Click Advertising?

Typically, the first sign of trouble is when your budget begins to rapidly drain and your campaign isn’t receiving any conversions from those clicks. Its likely fraudsters are at play, using one of these fraudulent methods.

Click Farms. Fraudsters pay workers (generally in third world or developing countries) a subpar amount of money to click on advertisements all day. This depletes the advertiser's budget and generates revenue for the fraudsters. Since click farms use humans, it makes it harder to determine if ad fraud is afoot.

Botnets. Botnets are networks of malware-infected computers with the same purpose as click farms - to drain the advertiser's budget and generate fraudulent revenue. This type of fraud can be hard to detect and normally runs on an oblivious user’s computer without consent.

Ad Injection. Have you ever been offered a free browser extension or toolbar? This is how injection malware implants onto your computer and injects real ads on sites without consent. When these ads are clicked, advertisers are charged.

Domain Spoofing. This type of ad fraud can get past even the keenest set of eyes. Fraudsters mimic reputable sites with the slightest change to their URLs. They then sell space on their sites to advertisers for a discounted price. Every click that’s processed on their sites adds to the fraudsters’ pockets.

Ways to Protect Your Clicks From Ad Fraud

The best thing you can do when battling ad fraud is to filter your traffic. Try a real-time monitoring tool to stop fraudsters before they can eat up your ad spend. Or at the very least, require your advertising networks to implement a third-party filter.

Also, require transparency from your publishers. Know where their traffic is coming from. If they avoid answering, then avoid them, and take your business elsewhere.