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What is click fraud?

Click fraud is an Internet crime targeting pay-per-click advertising systems. Click fraud occurs when a person or a group of persons, computer software or an Internet bot clicks on an ad for the sole purpose of generating income for the publisher or putting a competitor out of business and not because of any real interest in the products advertised. Click fraud is considered a felony in many places such as California and the United Kingdom.

Pay-per-Click Advertising and Click Fraud
PPC advertising is a contract between two parties – usually an advertiser and a webmaster/publisher – where the advertiser agrees to pay the publisher an amount of money for every click on the advertised ad in the publisher’s website. In time, this system grew to involve advertising networks which act as middlemen between advertisers and publishers. Some of the most popular advertising networks are Google AdWords or Adsense and Yahoo Search Marketing; they also act as publishers since they also publish ads themselves. This set up was long contested to be a breeding ground for click fraud since Google and the other advertising networks also profit from the fraud.

Click fraud can also be committed by parties not related to the publisher or advertising network in any way. These are generally harder to detect since they cannot be charged with fraud or breach of contract. These parties may involve competitors of companies involved in the pay-per-click program; they commit click fraud to force the competing company to pay out large amounts of money for advertising and thus eventually force them out of business. Competing publishers may also commit click fraud to frame their rival publishers so that the network advertisers and advertisers will terminate their contract with these publishers.

Legitimate Clicks
The main hurdle that advertisers, advertising networks and publishers have to overcome in resolving click fraud is finding a way to determine which clicks are legitimate and which are not. The other problem in this kind of advertising system is determining who should pay for the click fraud in the event that it was not the publisher who did it; both publishers and advertising networks would not want to pay for something that was beyond their control.

Automated Clicks
Click fraud can be committed by either a person, a group or Internet bots designed to emulate humans clicking the PPC ads on web pages. A click fraud committed by the same person or groups can easily be caught since the IP addresses where these clicks are coming from and the relationship of the people can easily be verified.

Botnets and zombie computers can also generate clicks through the installation of Trojans and ad-clicker spyware into the victim’s computer. Using this method, victims may generate profits for the perpetrators without them even knowing it.

Because of these issues and the different laws of different countries concerning such activity, click fraud is one of the most common Internet crimes today and is largely a crime that goes unpunished in many cases.

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