Click Fraud

Definition - What does Click Fraud mean?

Click fraud is an Internet crime where a person, computer program or automated script is maliciously used to register clicks on pay-per-click (PPC) advertising. Click fraud is a crime because each click accrues as a cost to the advertiser, even though the clicks are driven by people who have no interest in the advertised product or service.

Techopedia explains Click Fraud

In its simplest form, a person can engage in click fraud by using different computers – such as a work computer – to click on ads he or she has placed on a personal website. This basic click fraud, along with asking friends and family to click through on ads, generally is not on a scale that is large enough to concern companies that pay for online ads. Programs and scripts, however, can quickly use up an advertising budget while producing little or no sales in return. Parties that may engage in click fraud include: Competitors of advertisers: The competitors who are in the same field of advertisers use their force to interrupt the advertiser’s ad campaign by clicking through the ads, even though they have no intention of buying the products. By doing this, the competitors may not gain directly, but they can hurt the advertisers by essentially wasting their advertising budgets. Advertising networks: Clicks on an ad equate to more revenue for the advertising network serving the ad. This means that there is very little incentive to sniff out click frauds and more than a little pressure to set up click networks to maximize the revenue from a given ad campaign. Ad driven sites: Sites that offer free content and make their money from ad revenue – shared with the ad networks – may set up click frauds for the obvious reasons of juicing revenue. In the case of ad networks and ad driven sites, however, click fraud can quickly hit a wall of diminishing returns. Most companies running ad campaigns independently track metrics, such as click-through conversions (referred visitors divided by any spike in product sales), to check the return on advertising dollars spent with certain networks or sites. If these numbers become diluted through click fraud, the advertiser is likely to demand a reduced rate or simply quit using under performing sites or networks. Aside from this natural check on click fraud, the definition of an invalid click and the proving and prosecution of click fraud cases are fraught with complications. More often than not, suspected click fraud networks are subjected to lawsuits rather than criminal cases
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