What is Click Fraud?

The world of advertising has evolved a lot over the past two decades. Companies have shifted from traditional advertising to online advertising and this is not surprising given the advantages of online advertising over the traditional ones.

However, the world of online advertising is not all sunshine and rainbows, it comes with its challenges. One of the most prominent ones being click fraud. Companies lose billions every year due to click frauds. 

Click Fraud is a type of malicious activity in which Pay-Per-Click (PPC) advertisements are repeatedly clicked to exhaust the companies’ advertising budget or to increase the revenue of the publishing site. That however does not mean that clicking on an ad 4-5 times is a crime; usually, click frauds occur on a large scale where many links are targeted and clicked multiple times. 

In this article, we will look into click fraud in detail, see how it affects a company and give some solutions that can be adopted to help protect your company from it.

How does click fraud work?

There are different kinds of advertisements, and one of them is Pay-Per-Click (PPC) advertisement. In PPC advertisements, the publishers are paid based on the number of clicks. In other words, publishers generate some money with every click on the advertisement.

So, in click fraud, these PPC advertisements are clicked multiple times with no intent to purchase the product or services being advertised. Click fraud occurs when an individual or scripted software pretends to be a legitimate user and clicks on ads maliciously. 

Who are the perpetrators of click fraud?

  • One of the main reasons click fraud is performed is to reduce competition. Competing firms engage in click fraud. They click on each other’s ads in order to drive up the amount that competing firms pay for the advertisement. If performed on a large scale, it can even push out a competing business out of the market.
  • In some instances, the publishers themselves indulge in click fraud to increase their revenue. This is more common in affiliate networks where marketers don’t have much visibility into the advertising data. 
  • Some customers who highly value a company may also indulge in click frauds and click on ads of competing companies, knowing that it will cost them money and cause them loss. Though the effect of this is minimal.

How do click frauds affect website analytics?

Click frauds can mess up your website analytics. If bots are interacting with your website and their data is recorded, it’s difficult to measure the actual effectiveness of the displayed advertisement. 

When the people running the website want to know how well their content is engaging with the audience or information about the traffic on the website or user behavior it’s quite not possible to determine the exact effectiveness. 

How to determine and identify click fraud

Being well aware of click fraud is very important so that you can identify it and ensure the advertising budget is not wasted. The advertising budget is a crucial part of any business because it helps generate sales, and selling is the ultimate goal for businesses. So before knowing how to deal with it. First, let us see how to determine when fraud is happening with you.

In order to determine when fraud is happening with you, you need to keep a check on your analytics and ad performance. The following points will help you in recognizing when click fraud is happening with you:

  • If there is a drastic increase in bounce rate for a landing page, it may indicate foul play. For instance, if the earlier bounce rate was between 40-50% range but suddenly spikes up to over 80% you may want to check what’s happening.
  • An unusual number of clicks and impressions pouring in can also mean click fraud.
  • If ad costs are increasing but the conversion rate is low. 
  • Continuous clicks from a similar ISP server.

If you observe any of these and suspect that it may be click fraud, report it to your ad platform and if anything is found in support of your conviction, you may even get credits for it.

How to prevent click frauds from happening :

  • Target the locations where your audience is more active. Instead of risking your whole ad budget by advertising globally, target some specific country or location. It will significantly reduce the chances of fraud.
  • Display your ads on trustworthy, high-quality placements. It may cost you a little more but is better than losing your whole budget to fraud. 
  • Know major competitors in your field and monitor the clicks from their IP addresses and you can even block their IP addresses.
  • Last and most importantly, educate yourself about cyber-security. 

We at NautOne offer some commendable courses on cyber-security that you might want to check out. For more details visit our website or mail us at hello@nautone.com

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