For as long as people have been conducting business, criminals have been trying to take advantage. And as businesses have moved online, so have fraudsters. Ad fraud, and especially click fraud, are a real problem for businesses that promote themselves online. But worry not. In this brief (but comprehensive) guide, we talk about how to identify click fraud and what you can do about it. 

What Is Click Fraud, Actually? 

Click fraud is a form of digital ad fraud that happens when an individual or a program (set up by a cybercriminal) exploits online ads. Usually, the purpose is that of gaining financial rewards from digital ads, but it can also be sabotaging a business.  

Click fraud usually happens by deploying repeated clicks - either manually or automatically - on a PPC ad. These fraudulent clicks lead to fraudulent charges on the advertiser, affecting both the advertiser's budget and the results of the advertising campaign. 

In order to stop click fraud, it's important to first understand how to identify click fraud. 

Who is behind click fraud?

To better understand how to identify click fraud, we should first have a look at how it works and who is behind it. We can call anyone engaging in fraud a 'cybercriminal', but we should note that the intentions behind click fraud can differ. So, who is behind click fraud? 

Competitors: Your competitors might engage in click fraud in order to sabotage your advertising budget and your business. By making you waste your budget on spammy clicks, they can make sure you can no longer target real human customers. 

Publishers: Website owners or application builders can also commit click fraud in order to generate more revenue for themselves. They can either click on ads or use malicious software that clicks your ads. Once again, this stops your ads from reaching potential customers. 

Affiliates: As regular publishers can win from click fraud, so can affiliates. Hosts of affiliate networks may also attempt to take credit for more clicks. This is quite a dangerous situation, as affiliates should be considered business partners. However, some will choose to engage in click fraud activities. 

Customers: This scenario is less likely, but still possible. Upset customers may decide to click on your ads just so that you 'pay' and your advertising budget is spent. 

How click fraud affects advertisers 

Click fraud can seriously impact a business. The goal of it is, after all, to 'steal' money from a company. There are two main ways in which click fraud affects advertisers:

Financial losses

According to Statista, the cost of ad fraud is expected to grow to $44 billion in 2022. Our own research has shown that around 17% of all PPC clicks are in fact click fraud. 

These statistics show that click fraud can seriously impact a company's advertising budget, leading to great financial losses. The worst part is that the wasted budget doesn't actually get used to targeting a real audience. 

Inaccurate data

What makes things even worse is that fraudulent clicks are disguised as genuine clicks. This will impact campaign metrics. For advertisers, it can be difficult to identify the bad traffic from the good one. If click fraud isn't identified and stopped, marketers will make data-driven decisions based on flawed data. That's why it's important to know how to identify click fraud in a timely manner. 

How to Identify Click Fraud 

Click fraud is bad for business. Nobody wants to be a victim and in order to fight it, you first need to know how to identify click fraud. Once you do this, you can proactively work on blocking the sources of bad traffic to your ads. 

How to Identify Click Fraud: 10 Signs

Any sign of unusual activity on your ads may be a sign of fraudulent activity. You should look for unusual patterns and results that don't match your experience and expectations. 

Here are six signs that may help:

A sudden surge in clicks

Click fraud, especially when done via click bots, may lead to your ads receiving several clicks in a short amount of time. You can check your analytics to see if this is happening. If it is, check if this traffic is coming from the same IP address. This could be a sign of click fraud, especially if the visits are coming from a location that is not part of your targeting.

Unusual peaks in impressions

Similar to the number of clicks, a sudden rise in the number of impressions - the number of times that your ad is shown - can be a sign of fraudulent activity. Your ad may be showing in the wrong places or formats.

Low conversion rates

This metric should be taken into consideration together with the number of clicks or visitors. Bot traffic will not convert, so no conversions for high amounts of traffic may be a sign of click fraud. 

Very high click-through rate (CTR)

You can also look at your CTR to spot unusual click spikes. Once again, you should put this metric into perspective, together with other metrics, to identify if something is wrong.  

A low number of page views

Especially when correlated with high traffic, this metric can show the lack of engagement with your webpage. If this engagement is very low, despite the traffic, you could be dealing with bot traffic. 

High bounce rates

This is also a metric that shows a lack of engagement. If visitors don't stay long on your page or don't explore your content, that shows a lack of interest. It could also be that the traffic is not human and is therefore not engaging with your page as a human would. 

An unusual amount of time spent on site: As in the case of a high bounce rate, too little time spent on site can indicate a lack of engagement - or bot activity. But the side of that coin isn't a great sign either. Too much time on a website - without any engagement - is also unnatural of human behaviour. 

Lack of interactions: After clicking on an ad, a human would most likely read the content on the landing page, scroll and click. He would interact with the website. A bot, on the other hand, won't do that.  

Unusual IP addresses: Traffic coming in from outside of your targeted locations or from places where you have no activity mai also be indicative of bot traffic. If, for example, you are a US retailer (who only sells in the US) and you are getting a lot of traffic from Asian countries, that traffic will most likely be spammy. 

Bad ad placements: Suspicious-looking domain names and strange-looking applications may also indicate fraudulent activity. If you are dealing with traffic coming in from any strange or unfitting ad placements, you might be dealing with fraudulent activity. 

How to Spot a Click Bot 

A click bot is programmed to carry out click fraud, usually by executing many clicks. You'd probably assume that bots act differently than humans. 

Unfortunately, this is not true. 

Bots have gotten more sophisticated over the years - and also better at mimicking human behaviour. 

However, knowing how to identify potential click fraud can also help you identify potential bot traffic. Because yes, the two phenomena are closely related. We can assume most modern click fraud is driven by bots - bots are highly efficient and, as we've already pointed out, do a great job at mimicking human behaviour. 

But shouldn't click bots be illegal?

Bots themselves aren't bad. 'Good' bots do help make the internet a friendlier place. But while bad bots do affect organizations and their budgets, it is difficult to criminalize the use of bots for personal financial gains. The problem is complex, as it involves both different pieces of legislation and the challenge of proving the intent behind the fraudulent activity. 

So how can I spot and stop a bad bot?

You can't really stop bots. You can, however, mitigate them. Bots and click fraud schemes are constantly evolving and becoming more complex. The best way to avoid being a victim is to simply make it more difficult for cybercriminals to target you. 

If you are a 'difficult' target, you will become an expensive target, making it not worth the (financial) effort of targeting your business. Applying different kinds of click forensics, for example, can help you identify and block suspicious traffic. That does not stop new fraud attempts, but it will slow things down.

Aren't Ad Networks Taking Care of Click Fraud? 

Yes, they are. They are trying. Most ad networks, including search giant Google, are constantly implementing measures for preventing click fraud.

For example, ads on the Google Ads network go through an automated detection process that analyzes potential instances of click fraud. If they don't pass this automated process, ad activities may also be sent for manual review. If Google's algorithms or manual reviewers detect that a click was fraudulent, the advertiser gets refunded. 

However, these measures are not flawless. The activity of cybercriminals is constantly evolving to 'escape' known identification measures. While ad networks are doing their share in fighting click fraud, it is at times not enough. It is up to businesses to understand how to identify click fraud and how to stop it. 

Click Fraud Protection Software Explained

How to identify click fraud is one interesting topic. But how to stop click fraud, is another. Looking into campaign and website analytics is essential for spotting any fraud-related issues in time. 

You then have to work on blocking the 'bad' traffic - spammy, competition, or bot traffic. 

Since click fraud is a rather common problem, solutions have been developed. Click fraud protection software is designed to give you even more data on your ad campaigns and to help you block bad traffic. This type of software is supposed to make an advertiser's job easier through more data and an easier way to take action.

ClickGUARD, for example, offers an advanced, automated system to help you block click fraud, invalid traffic, and bot-driven clicks.

Click fraud is a real modern 'epidemic'. While ad networks are doing their best to stop it, their efforts are unfortunately not enough. As a digital advertiser, you should know how to identify click fraud and how to stop it from ruining your budget and your data. In other words, you need a proactive approach to fighting click fraud: set up processes and tools that help you eliminate threats in a fast and efficient manner.