Click fraud is a malicious activity in online marketing where an individual or group creates illegitimate clicks on online advertisements in an effort to defraud the advertiser. This activity can take the form of a person manually clicking ads, automated scripts or bots, pay-per-click services, and other activities.
At its core, click fraud is an attempt to simulate legitimate visits to an advertisement or website in order to drain the advertiser's budget. While there are legitimate reasons a certain user may click on an ad multiple times, such as a consumer returning to the site or someone refreshing their page, malicious click fraud means the consumer is not engaging with the content. This type of fraud can be particularly damaging for a business’s advertising budget because the company has to foot the bill for every click, regardless of whether the consumer clicks through to their website or not.
Often times, this fraud originates from malicious competitors or from individuals or organizations looking to make a quick buck. It is also difficult to uncover and trace since the clicks are often coming from varying IP addresses and countries.
In order to understand and identify click fraud, it is important to distinguish between true click fraud, which involves invalid advertising activity, and false click fraud, which is simply activity that is not necessarily malicious, but cannot be associated with a definite consumer action.
True click fraud has one main purpose: to siphon budget away from a business’s most successful advertising campaigns. This type of fraud is typically easy to spot as it is often associated with high CPC (cost-per-click) rates and low CTRs (click-through rates). In other words, clicks that cost more but do not result in a consumer visiting the website or taking an action are most likely fraudulent. In addition, if a single user is generating multiple clicks on ads, it is an indication of a malicious actor.
False click fraud is a bit different. It is typically caused by automated systems and/or users who are unintentionally generating large numbers of clicks due to non-malicious but poor web page design or browser settings. This type of fraud is often more difficult to identify as it is not associated with malicious intent.
In order to protect against both true and false click fraud, advertisers must have a strategy in place which includes monitoring the behavior and activity of their campaigns, including the following:
• Knowing and understanding your target market by exploring and researching potential click-throughs.
• Leveraging click rate limits to reduce the amount of fraudulent clicks.
• Utilizing algorithms to detect invalid clicks.
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• Setting up and monitoring anomalies in click activity.
• Taking proactive steps towards identifying and discouraging potential click fraud.
• Restraining click activity in foreign countries or locations where click fraud is more likely to occur.
• Blocking suspicious IP addresses.
• Ensuring all ad placements are in the correct format and correctly placed for the market you are targeting.
• Working with trusted advertising networks or 3rd party vendors to help identify suspicious activity.
• Regularly examining campaign performance, tracking the actions and behaviors of users, and monitoring click rates over time.
• Having a dispute resolution system that can address issues that arise from suspicious or fraudulent activity.
By following the above advice and taking preventative measures against click fraud, advertisers can safeguard their marketing budget and ensure that it is not being siphoned away by malicious actors.