Click Fraud: The 2 Main Reasons Perpetrators Engage in It

Hacker hack system on virtual computer screen on blurred background.

If you have never heard of click fraud before, chances are you aren’t involved in online advertising as a business owner or marketer. Even so, plenty of small businesses that invest in online advertising lose money to click fraud. Some are aware of it while others are not. Those in the latter group might not even know why scammers engage in click fraud.

Click fraud is perpetrated against online advertisers for two main reasons: driving ad revenue and exhausting an advertiser’s marketing budget. The disparities in these two goals should make it clear that different groups of people are involved. Those looking to drive ad revenue are trying to make money. Those trying to exhaust an advertiser’s marketing budget are trying to hurt the competition.

What Is Click Fraud?

What is click fraud, exactly? It is the act of clicking on pay-per-click (PPC) ads with no intention to follow up on the landing page or actually buy something. It is disingenuous at best; it is illegal at worst. Click fraud is a crime in many countries. And yet it is perpetrated with impunity.

How Does It Drive Revenue?

The desire to drive ad revenue is by far the most common reason for perpetrating click fraud. It works thanks to the way PPC advertising is designed. The model on which PPC is built is in the name itself.

Ad platforms that sell PPC ads expect advertisers to bid on the keywords they want to focus on. More attractive keywords generate higher bids. Whatever an advertiser bids, if the bid is accepted, becomes the amount for each click the ad gets.

Let’s say a company successfully bids $1 for particular a keyword. Ad headlines and descriptions are created and uploaded to the advertising platform. The ad will be displayed based on complicated calculations involving keyword strength and user search queries. One way or the other, the advertiser is not charged for displaying the ad. It is only charge when the ad is clicked.

Scammers running click fraud schemes generate fake clicks in order to run up the bill. Every click means more revenue in their pockets. Meanwhile, the advertiser isn’t getting anything for his money because his landing page isn’t actually being viewed and his products aren’t selling.

How Does It Exhaust Marketing Budgets?

The second reason for engaging in click fraud is to drain the advertiser’s marketing budget. This should be simple enough to understand. Fake clicks are being generated by a competitor who knows full well that every click represents a charge to the advertiser’s account. The competitor also knows that the fake clicks do not translate into sales.

You essentially have a situation in which an advertiser is putting money into marketing without generating a high enough return to make the investment worthwhile. At that point, PPC advertising becomes he money-losing proposition. The advertiser is spending more than he is earning. If the click fraud goes undetected, he could end up spending every penny without increasing sales.

Can Click Fraud Be Stopped?

All of this leads to the inevitable question of whether or not click fraud can be stopped. According to the people behind the Fraud Blocker click fraud protection service, it can. Stopping it involves analyzing data and following up on red flags. It involves knowing how scammers work and not letting them do what they want to do.

Click fraud is most often perpetrated to drive ad revenue. Sometimes companies engage in it to harm the competition. Regardless of the motivation behind it, click fraud is destructive. But it can be prevented.