What is Pay-Per-Click (PPC) Fraud?

Learn how fraud impacts Pay-Per-Click (PPC) advertising campaigns and can quickly deplete PPC advertising budgets.

Life was simpler 50 years ago. People weren't glued to their smartphones and kids played outside instead of video games. Homeowners didn't lock their doors as much as they do today.

Pay Per Click Fraud

Advertisers had less to worry about 50 years ago as well. Flyers, billboards, newspapers, television—these traditional venues are straightforward. The ability to compromise the delivery of an ad was nearly nonexistent. Today, however, that's a different story. This is because we have the internet.

The internet has changed our way of life, including how we receive ads. There's just one problem: Not every paid pay-per-click (PPC) ad is clicked by a human. This is because fraud is rampant in the online advertising industry.

In this article, we're going to:

  • Focus on what PPC click fraud is
  • Examine how PPC fraud happens
  • Give a PPC fraud scenario
  • Discuss ways in which PPC click fraud can be mitigated
What is PPC Advertising Fraud?

Pay per click (PPC) advertising is highly effective at placing your business’s name in front of potential customers. These are the same people who are likely interested in your goods or services. But because you pay based on anonymous clicks from a search engine, this type of advertising has become a common target for fraud.

Let's put it this way: PPC click fraud is an intentional, malicious action.

PPC advertisements work by allowing businesses to pay search engines to display their advertisement at the top of search results. The business then pays a small amount (often determined in a bidding process) each time someone clicks on their ad. When the budget they set for the ad has been used up based on the number of people who have clicked, the ad no longer displays. PPC fraud occurs any time someone clicks on a PPC advertisement for malicious reasons without any legitimate interest in purchasing goods or services from the business. This could range from an individual physically clicking their mouse or a program designed to generate millions of clicks at a time. This type of fraud will waste your money, reduce your search visibility, and skew your marketing metrics.

Competitors often participate in click fraud to knock your advertisement from the list and elevate their own in its place. By using up your budget and eliminating your ad quickly, the competitor’s ad moves to a higher position. Not only do they eliminate your advertisement from the search engine, but they also use up valuable advertising money that cannot be put toward other types of marketing.

This type of behavior skews data and can cause businesses to draw incorrect conclusions about their campaigns. PPC fraud can make it look like very few people who visited your site are taking any action. When in reality, very few clicks came from anyone with a real interest in your business. Your site could be wonderfully effective for those people; however, their actions are offset by thousands of fraudulent clicks.

Who’s Responsible for PPC Click Fraud?

Possible malicious PPC fraud actors include:

  • Disgruntled customers
  • Unethical competitors
  • Advertising agency hired by unethical customers or competitors
  • Bots & automated scripts

Disgruntled customers looking for ways to get back at a company can click on their advertisement without any intent to purchase. The disgruntled person simply wants to waste the company's money. Individuals like this are not likely to employ any means of generating mass clicks; therefore, unless they’re highly motivated, they won’t likely have a large effect on your campaign. That being said, companies should still protect themselves against all PPC fraud.

Competing companies or the advertising company employed by competing companies are more dangerous potential threats. Competitors benefit from PPC fraud by suppressing your advertisement and wasting your money. But ad agencies who are paid to promote your competitors sometimes take matters into their own hands; they look better and generate more profit when their client’s ads come out on top. One way to ensure that happens is to illegally suppress your ads. Unscrupulous ad agencies can be among the most dangerous perpetrators of PPC fraud because they’re more experienced with online marketing.

Revenge of the Bots

Due to the nature of how PPC clicks are rewarded - the system invites a large amount of incentivized fraud and non-compliance. For example, content providers display PPC ad units on their sites to monetize their content. They are rewarded for every visitor that clicks an ad. Sounds reasonable right? Well every now and then, publishers will get greedy and run bots and similar programs that will blend non-human, fake traffic into their natural traffic patterns. This creates a very advanced type of fraud that can be difficult to identify without any PPC quality monitoring tools in place. Adequate bot detection plays an important role in identifying fraudulent pay-per-click advertising.

The Plumber of Midtown, USA

Let's say you own a plumbing business in Midtown, USA. You might pay to have PPC advertisements display when someone searches for  “plumber, midtown.” This would ensure that anyone searching these keywords would see a link to your page at the top of the search results. This is supposed to driving potential customers and clients to your landing page. With careful planning, you set a budget for the ad campaign and look forward to plenty of interested customers clicking the link.

Here's what you don't expect: A malicious competitor—another plumber in Midtown—sees your ad. The owner of this business doesn't want local customers finding your site, so he employs an unscrupulous ad agency to generate false clicks on your ad.

Suddenly, your ad receives thousands of clicks in a matter of minutes! You're initially excited; however, you become dismayed when you realize these "website visits" aren't converting into customers. Your total budget is quickly depleted and the ad disappears. Yet few of those clicks seem to be generating any leads. You finally determine that your website must be ineffective if so many customers are visiting and leaving.

At the end of the day, you have wasted valuable advertising money without generating results. Potential customers did not see your ad, and as a result, you draw incorrect conclusions about the efficacy of your campaign.

How to Mitigate the Effects of PPC Fraud

PPC fraud is more common than most people realize; if you don’t address it, you’re likely wasting some of your advertising budget and may not be getting correct metrics to strategize future campaigns.

IPQS can mitigate the effects of PPC click fraud against your online marketing efforts. We know what to look for when identifying fraudulent clicks and can block malicious actors without affecting legitimate customers. By hiring an expert in preventing PPC fraud, you can ensure your PPC campaigns are effectively driving customers to your website and increasing your overall profitability.

Contact us to learn more about how IPQS can save your advertising budget from PPC click fraud.

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