Pay per Click Fraud

Pay per Click or PPC is a form of Internet advertising that is used on content sites (like blogs for example) as well as search engines and ad networks. Advertisers post ad content with various such web hosts and the host is paid only if and when their ad is clicked. The term "pay per click" literally means what is says,  the advertiser pays each time a visitor clicks on the ad advertisement.

Google, Yahoo! and all the other PPC providers large and small are today scooping up tens of billions of dollars in ad revenue based partly on the assumption that clicks are a reliable, quantifiable measure of consumer interest. But with so much cash up for grabs, the PPC world has not unsurprisingly attracted armies of con artists whose activities have the potential to seriously erode consumer confidence.

Click fraud occurs when a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an ad for the purpose of generation a charge per click without having actual interest in the target of the ad's link. Though hard to police and control, some search engines have developed automated systems which attempt to guard against these practices with varying degrees of effectiveness, but even the most sophisticated of them are not infallible.

Further complicating the situation is the fact that the advertisers themselves benefit financially from such fraud. The largest networks fulfill two roles, as PPC providers and as publishers themselves (via their search engines), which can create conflicts of interest. For example, while a PPC provider will lose money to click fraud when it makes payment to a publisher, it more than makes up for it when it collects money from an advertiser, so indirectly, the PPC provider profits from click fraud.

Click fraud can be something as basic as starting a small web site, becoming a publisher of ads, and clicking on those ads to generate revenue. Often the number of clicks and their value is so small that the fraud goes undetected. Larger-sized frauds involve running scripts which simulate a human clicking on ads in web pages on a wide scale.

Another source of click fraud is non-contracting parties, who are not part of any pay-per-click agreement. Some examples of non-contracting parties are:

Advertising competitors - By deliberately clicking on their competitors ads (thereby forcing them to pay for worthless clicks) they can weaken them or even put them out of business, even if they aren't profiting directly from the click fraud.

Publishing Competitors - Publishers may try to frame their competitors by making it look as if they are clicking on their own ads, resulting the advertising network terminating their business relationship with them.

Malice - Like the types of people who deliberately develop and then email computer viruses, some will engage in click fraud not for financial gain just to make a publisher and/or advertiser look bad for whatever reason.

Friendship - Sometimes when the friends and/or family of publishers learn that their friend's business profits when their ads are clicked, they may decide to do so themselves, thinking that they are helping out. If they overdo it however, they can do more harm than good when the publisher is accused of click fraud.

While advertising networks try to stop fraud by all such parties it's often hard to know which clicks are legitimate. Usually the best an advertising network can do is to identify which clicks are most likely fraudulent and not charge the account of the advertiser.