Click fraud is a form of cybercrime. It happens when someone clicks on your “pay per click” advertisement to cost you money, with no purpose of doing business with you. Fraudulent clicks can be done by a person, automated script, online robot (bot), or computer program. Attempting to appear as a legitimate internet user, the false clicks are developed to form an artificially large number of clicks.
This costs advertisers billions of dollars per year. In 2006, lawsuits against internet giants Google and Yahoo! resulted in both companies agreeing to refund millions of dollars to advertisers wrongfully charged for click fraud.
Click fraud is illegally clicking on pay-per-click (PPC) ads to raise site revenue or deplete a business’s advertising budget. Click fraud is separate from invalid clicks (those that are duplicated or made by the ad’s host/publisher) in that it is deliberate, malicious, and has no prospect for the ad to result in a sale.
Click fraud transpires with pay-per-click advertising and may involve either a human, a computer program, or an automated script pretending to be a legitimate user and clicking on paid search advertising with no intention of buying something.
More On Click Fraud
Many websites and online platforms host promotions and are reimbursed by the businesses that advertise hosting their ads. One of the payment schemes is that the hosting website will be paid based on how many visitors click on the ads. Click fraud occurs when an ad is clicked in a duplicitous manner without any real intent or interest in visiting the site or purchasing the advertised service or product.
Click Fraud to Lower Competition
Click fraud is perpetrated for two main reasons: to lessen competition among advertisers or generate revenue by gaming the PPC advertising system.
As another illustration, a hostile attacker may spitefully attempt to make it look like a publisher is clicking on its ads, which could cause an advertisement network to terminate its relationship with that publisher, thinking that they are acting in bad faith. Since PPC advertising revenue is the primary source of revenue for some publishers, this practice can put a publisher out of business.
In some cases, click fraud may also be committed merely to vandalize without a certain financial motive or when friends, family, or fans of a publisher click on ads on a website to generate more revenue. Both forms can be difficult to detect.
Click Fraud to Artificially Increase Revenues
Another cause would be site owners (publishers) committing click fraud to increase their ad revenue. This arrangement involves three parties:
- An advertising network (such as Google’s AdSense or Yahoo! Search Marketing) places the ad.
- The publisher that publishes the ad
- An advertiser assembles the ad and contracts with the advertising network to place the ad
Click fraud under this infrastructure ensues as publishers click on ads that have been placed on their websites to induce revenue.
Click Fraud in Practice
The most straightforward, least noticeable way to perpetrate click fraud is to make a website that hosts banner ads and click on those ads as much as possible to generate revenue. Some businesses will hire low-cost workers—often located abroad—to click ads all day manually. These are known as click farms.
Others will author or use scripts to automatically click on ads. Both of these techniques are readily traceable unless the user or script disguises the computer’s proper IP address, which is painless to do through a VPN. Another popular way is by using computer viruses to secretly take over a large number of computers and have those computers click ads.
Specifying and Eliminating Click Fraud
When click fraud emerges, a company needs to know to avoid wasting its advertising budget. An advertising budget is essential because it helps induce sales, and selling a product or benefit is the purpose of a company. If a business’s advertising budget is strained through click fraud and not reaching actual potential customers, it can affect the business financially.
There are a few ways that click fraud can be determined. One is through constant clicks from ISP servers that seem to be identical, another is through ripples in costs that are not in sequence with earlier ad campaigns or statistics, a lack of conversions (individuals purchasing your product) even though ad costs are rising, and any other strange happenings that cannot be justified.
Many providers help contain click fraud, but a company can seek to specify fraud itself. A company can decide to promote on quality, well-known sites, block specific IP addresses, use software that stops click fraud, and continuously observe their logs and budgets.
Why is Click Fraud Perpetrated?
There are two primary motivations for someone to commit click fraud:
- Increased Profits for Webmasters Who Publish Ads – If a webmaster charges advertisers by the click, they may use a click fraud system to increase profits. A webmaster can run up the bill on an unsuspecting advertiser by artificially boosting the number of clicks.
- Competition Among Advertisers – Advertisers vying in the same market location may use click fraud to deplete money from their rival’s advertising budgets. While not directly increasing their profits, a competitor can cost a rival large sums of money by artificially inflating the number of clicks on their ads.
Is Click Fraud Illegal?
Using a computer to perpetrate click fraud is a felony in many jurisdictions, such as California. Presently, marketing lobbyists are aiming to have federal anti-click fraud regulations passed. Nevertheless, few legal remedies presently exist.
How Can I Tell If Click Fraud Is Targeting My Business?
Currently, it is challenging to determine if your business is a victim of click fraud. However, several signs may reveal click fraud.
- Sudden and dramatic changes in click counts
- Intermittent periods of extremely elevated click counts, followed by periods of relative stability
- Significant click count differences in very similar terms. For example, three times as many clicks on “San Francisco Lawyer” as “San Francisco Lawyers”
- Clicks from parts of the world where business is not conducted
- Unusually high click activity on expensive keywords
What Should I Do If I Believe That My Business Is a Victim of Click Fraud?
Suppose you believe that your business is overcharged for pay-per-click advertisements due to illegal click fraud. In that case, you should contact the website’s webmaster on which you advertise immediately. Alerting them to possible click fraud can save you money. The webmaster or website owner may refund cash for clicks discovered to be fraudulent. Google and Yahoo! have agreed to refund enormous amounts of cash to overcharged advertisers.
Do I Need a Lawyer for My Click Fraud Problem?
Pressure is being put on the Legislature to pass laws to prevent click fraud. An entertainment attorney will be familiar with these new and changing laws. Additionally, your attorney will be able to help you get the money refunded if you have been overcharged due to click fraud.
Your attorney will help ensure that your business’s rights and assets are protected. Use LegalMatch’s attorney database to find the right business lawyer for your legal needs today. There is no fee to schedule a consultation with one of the experienced lawyers in your area.
