How Click Fraud Is Costing The PPC Industry Billions

How Click Fraud Is Costing The PPC Industry Billions

Ever since the introduction of pay per click ads back in the early 2000’s their popularity and use has taken off significantly. With the ability to allow any business to advertise their products and services online, it’s easy to see why PPC marketing has become so popular.

But did you know there is a dark side to pay per click marketing? A dark and malicious practice that is costing the average PPC user hundreds if not thousands of dollars a year?

If you use pay per click ads then you could be victim to the increasing problem of click fraud, without even knowing. To shed some light on click fraud, we’ve got everything you need to know about what it is and what you can do to protect yourself.

What Is Click Fraud?

To put it simply, click fraud is the fraudulent clicking of PPC ads by a 3rd party. The most common users responsible for click fraud are industry competitors and webmasters.

If you’re in a competitive industry, then the chances are you won’t be the only business running a PPC campaign. Other companies will be competing for the same keywords as you and will be doing everything to get the upper hand. This means that some unethical businesses will purposely click your pay per click ads in order to gain an unfair advantage.

Considering a company has to pay for every click regardless if they make a sale or not, click fraud can seriously affect a business’s budget.

However, it’s not just unethical competitors that are the primary cause of click fraud. Some webmasters are also becoming responsible for an increasing number of fake clicks. Many PPC networks such as Google AdSense often allow webmasters to display adverts on their websites. Every time they receive a click a portion of the advertising revenue will be given to the website owner.

In order to boost their earnings, some webmasters will fraudulently click on these ads. It might not sound like a big deal, but with some keywords costing $10 or more per click, it can become a big issue for advertisers.

To make the matter even worse, both competitors and webmasters will often use automated robots to do the clicking for them. This means a website can receive a barrage of fraudulent clicks in just a few minutes and waste an advertiser’s entire budget for the day. With the ability to disable competitors PPC campaigns from running by eliminating their budget, it’s easy to see why click fraud is on the rise.

Why Is It A Problem?

The biggest problem with click fraud is that it costs businesses billions of dollars a year. In fact, in 2016 alone it cost advertisers an estimated $8.2 billion with estimates for 2017 coming in at $16.4 billion.

Almost no one is immune from click fraud with every industry experiencing at least a bit of it. Usually the more competitive the industry or the more expensive the keywords, the higher the level of click fraud. From looking at the infographic below, you can clearly see that the finance sector is the most affected with over 20% of all traffic being bots.

Courtesy of PPC Protect

With the numbers constantly increasing year on year, the number of sectors and advertisers affected by click fraud is only likely to increase in the future. Thankfully, some PPC networks are doing something about the problem.

Are PPC Networks Doing Enough?

The increasing problem of click fraud hasn’t gone unnoticed by PPC networks. In fact, some networks such as Google AdWords have set up their own click fraud team to deal with the issue specifically. After all, if an advertiser is not happy that their money is being wasted, then they will eventually stop using the service altogether.

Google has had a traffic quality center for the past few years which actively monitors clicks on users adverts. If Google determines the click to be automated or fraudulent, then they will mark it as an invalid click and reimburse the advertiser. It sounds good in theory, but unfortunately, it doesn’t work as well. Combine this with the fact that Google makes over 90% of its profits from PPC marketing and charging customers for clicks, can they really be trusted?

To tackle the problem of click fraud, many 3rd party companies have built custom software that takes Google’s traffic quality center to the next level. Instead of waiting for the click fraud to be committed before doing something about it, the software already has an immense blacklist of suspicious IP addresses it blocks. Combine this with real-time click fraud monitoring, and advertisers can finally feel safe knowing their precious budget will not be wasted.

Click fraud might be on the rise, but thanks to the introduction of 3rd party software, the problem can be solved. If you’ve experienced click fraud and are fed up of wasting your PPC budget, then investing in click fraud prevention software is the way to go. Not only do they do a better job than Google’s click fraud software, but they’re also a lot cheaper than you’d think.

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