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Click Fraud – What is It?

Click fraud is a phenomenon that is as old as PPC model of online advertisement. As the name indicates, PPC (Pay Per Click) involves payment by an advertiser for every click on the advertisement, that may be a text ad, a banner ad or lately, video ads. The payment for every click made, that is the CPC (cost per click), is then split between the ad network and the publisher. Click fraud involves clicking on the advertisements without any intention of completing the desired action – which may be a sale of a product or a subscription, or any tangible activity. Click fraud has proved  to be the bane of online advertising, and is a major source of headache for paying advertisers and ad networks. Honest publishers are also negatively affected.

click fraud

Click Fraud

Let me give you an example to make this clear. An Adwords user pays a certain amount of money for every click on the Adsense ads – displayed on content network publisher websites or on the search engine result pages . This money is paid to Google, which then splits it with the publisher website. Ideally, any surfer, who finds the ads useful, will click through and reach the target page. A percentage of these visitors will then take the desired action – usually a purchase in some form or the other. The advertiser will measure the ROI by comparing the money paid on the number of clicks used to produce a unit sale.  Most advertisers, even if they advertise regularly, have a fixed daily or weekly budget.

Reasons for Click Fraud

Where does click fraud enter into the picture? Why would someone click fraudulently on the ads? The reasons for this are not far to seek. Suppose Mr X makes a website on the subject of, say, insurance, and decides to display Google Adsense on the website. Now, apparently, this is a very high paying niche paying as high as Rs 1,500 for every click. Now, this is the highest amount, the actual pay may be much lesser, but still high enough. Mr X will get a small percentage, say 20% to 50% depending on various factors. Thus, every click can potentially produce between Re 1 to Rs 300 for Mr X. Now Mr X, being a dishonest publisher, hits upon a dishonest idea – why not click on the ads himself! So next day, he sits in 10 different cyber cafes fo one hour each, opens up his site innocently, and clicks on ad or two. At the end of the day, he is richer by a few thousand rupees. (It is a very crude example, but this should give you a basic idea how click fraud works).

On a larger scale, this may take different forms. Fraudsters have employed various ideas such as web rings and actually employed a number of people (in low wage countries like China, India or Vietnam) simply for opening up their network of sites, and clicking on the ads. If you have seen any ads which promise you money ‘just for reading webpages’ or ‘just for clicking on ads’, then beware, you may very well be a part of a click fraud network.

Fraudsters have even evolved sophisticated software programs and scripts, which produce clicks in a masked manner, and make detection very tough.

Click fraud may be also perpetrated by competitors, who want to exhaust the ad budget of their rivals and seek to hurt them financially.

Sometimes, friends may turn into fraudsters unwittingly – they just think they are helping their friend to earn money by clicking on a number of ads in one go.

However, the most dangerous of the ilk is a person who does not profit in any way, and just seeks to get a publisher account banned from ad networks, only motivated by a malicious intent.

Who is Affected by Click Fraud?

Click fraud affects stakeholders at every level

- advertisers, who lose money on useless clicks, and get skewed results for their ad campaigns,

- ad networks (such as those run by Google, Microsoft and Yahoo), because its is a major revenue leakage (some people have alleged that ad networks are benevolent towards click fraud, since they are also earning money out of it),

- honest publishers, who may become unwilling victims of fraud, and get their accounts cancelled even without being involved.

India is one of the leading global centers of click fraud across all ad networks, in addition to countries like Egypt, Indonesia, Nigeria, Pakistan and China. Ad networks have taken a number of steps to protect themselves in India – for example – Google now approves only those web publishers in India who have a website with a self owned domain name, and the website should be at least 6 months old. EBay is also reportedly dropping its India specific affiliate programs, ostensibly because of click fraud.

Read Next – How to Combat Click Fraud


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