Understanding Click Frauds

Click fraud is, perhaps, one of the biggest mysteries around the pay-per-click advertising. According to the statistics on this kind of Internet marketing, about 20% of the clicks at the pay-per-click networks are generated in a fraudulent way. In other words, every fifth dollar one spends on his PPC campaign, are wasted in vain because of click frauds.

 

The nature of the click fraud idea is pretty simple. When you sign up and pay for PPC advertising, you expect real people, who are interested in the advertised products or services, to click on the ad and you are ready to pay for such clicks. However, in the situation with click fraud, it is a malicious program or automated script, that “clicks” on your ads, thus draining your advertising budget, but simultaneously adding profits to both a website, where your ad is displayed and to an advertising program you are with.

 

Who benefits from click frauds?

There are a lot of controversies and undisclosed facts about click frauds, but it is clear enough that within a chain of publisher-advertising network-advertiser, it is the advertiser, whose interests are harmed with click frauds. For other parties it may even be beneficial, since advertiser has to pay for all the clicks and does not have any instruments to define the portion of fraudulent clicks if such situation occurs.

 

It is interesting to note, that there were several lawsuits against the largest advertising networks in the past. For example, in 2004 Yahoo settled a class lawsuit against it for not doing enough to protect advertisers from fraudulent clicks. It cost 4.5 million dollars for the company. In 2006 Google had to pay out 90 million for settling the similar case.