What is Click Fraud and How Can You Stop It

Why is Click Fraud Such a Big Problem?

The financial impact of click fraud can be substantial, with costs ranging from nominal amounts to significant sums, depending on the ad's cost-per-click (CPC). These fraudulent activities drain advertising budgets, jeopardize revenue streams, and diminish the effectiveness of marketing efforts.

In the United Kingdom, for instance, estimates indicate that approximately 18% of ad impressions were fraudulent in the fourth quarter of 2021. Some projections forecast that by 2028, North America will lose $72 billion due to click bots and other types of PPC fraud, being the region most affected by it. The Far East and China will take the second-largest share, with $34 billion, followed by Western Europe with $29 billion and Central and Eastern Europe with $12 billion.

North America is expected to lose $72 billion in 2028 due to click fraud.

However, the detrimental effects of click fraud extend beyond paid advertising campaigns, infiltrating organic digital marketing efforts as well. Fraudsters may use various tactics, from directing fake clicks on competitors' paid ads to artificially inflating SEO rankings through fake clicks on organic search results. Additionally, businesses may grapple with fabricated social media engagement designed to tarnish brand reputation.

Click Fraud vs Unwanted Traffic: What is the Difference?

In some cases, clicks on ads are not necessarily malicious like a click bot or a click farm, but still hurt advertisers. It’s what is called unwanted traffic. While click fraud aims at draining ad budgets or distorting campaign metrics, unwanted traffic comprises clicks that, while not inherently malicious, still hinder advertisers' return on ad spend (ROAS). Let's see some examples:

1. Lookie-loos

Lookie-loos are users who click on ads out of curiosity or without any intention of making a purchase. Although their clicks may not be intentional sabotage, they can still undermine your ROI when left unchecked. By closely monitoring visitor behavior post-click, advertisers can identify low-quality interactions and exclude sources that yield minimal value.

Enhancing insights: Accidental engagements also contribute to unwanted traffic. These inadvertent clicks often occur when users click on ads by mistake or without realizing they're interacting with paid content. While ad networks endeavor to filter out such clicks, advertisers should remain vigilant to mitigate their impact on campaign performance.

2. Converted Customers

Existing customers may occasionally click on ads to revisit a brand's website, posing a challenge for advertisers. While these clicks aren't inherently fraudulent, advertisers may consider adjusting their ad targeting to exclude converted customers post-purchase, thereby optimizing ad spend and targeting.

3. Clicks Outside Targeted Geolocation

Clicks on ads originating from regions outside the intended target audience can distort campaign metrics and complicate ad performance analysis. While some clicks from VPNs or proxies may stem from legitimate users seeking privacy or bypassing censorship, advertisers must implement additional safeguards to mitigate the risk of fraudulent or low-quality traffic.

How Click Fraud Can Affect Your Business

PPC fraud can cause significant damage to a business's advertising efforts in multiple ways.

Low ROAS: One of the most significant impacts of fraudulent clicks is low ROAS. When a substantial portion of clicks stems from fraudulent activity, businesses pay for ad clicks that will not result in any meaningful return on investment. This can significantly impact a business's bottom line, and in some cases, even render the ad campaign unprofitable

Distorted metrics: Click fraud distorts the campaign metrics, making it almost impossible to determine the actual effectiveness of an ad campaign. The metrics can be skewed if numerous clicks come from click bots, click farms or other fraudulent sources. And when campaign optimization is based on guesswork or inaccurate data, marketers might spend time on tasks with little or no return. For example, they may start optimizing high-traffic, low-performance campaigns, hoping to improve conversion rates, instead of solving the root problem – fraudulent clicks distorting campaign results.

Wasted time and effort: Click fraud prevention can also consume significant time and effort for internal teams. Monitoring and stopping click fraud can be time-consuming and demand substantial resources, diverting attention from other vital tasks that could help the business grow. Teams devoted to click fraud prevention may also be redirected from other critical duties, resulting in additional resource wastage.

Sectors Most Affected by Click Fraud

While click fraud poses a threat across the entire spectrum of online advertising, two sectors have emerged as particularly frequent targets

1. Travel and Tourism

The travel and tourism industry, fueled by dreams of exotic explorations and relaxing getaways, has become a breeding ground for fraudsters. In 2022, this sector held the dubious honor of the highest digital ad fraud rate, reaching a staggering 1.7%. This alarming statistic indicates that for every 100 clicks on travel ads, as many as 1.7 might be fraudulent, leading to significant losses for businesses and skewed campaign data.

2. Media and Sports

The vibrant world of media and sports, with its vast and passionate audience, is also not immune to PPC fraud. In 2022, this sector experienced a fraud rate of 1.6%, highlighting the growing interest of fraudsters in exploiting the popularity of news, entertainment, and sporting events.

Why Are These Sectors Prime Targets?

• High Cost-per-Click (CPC): Both travel and media/sports sectors typically have higher CPCs compared to other industries, making them more lucrative targets for fraudsters.
• Large Audiences: Both sectors attract large online audiences, increasing the potential for large-scale fraudulent clicks.
• High-Value Campaigns: Advertising campaigns in these sectors are often high-value, with significant budgets on the line, making them more attractive to fraudsters seeking quick profits.

How to Identify Click Fraud?

Click fraud detection requires keen observation and strategic vigilance. But fear not! With the right tools and techniques, you can unravel these deceptive practices and safeguard your investments.

1. IP Address Surveillance

Picture yourself as a seasoned detective, tracing fingerprints to unmask a culprit. Similarly, tracking IP addresses reveals valuable clues. Use advanced analytics tools to monitor the IPs generating clicks on your ads. A sudden surge of clicks from an obscure location or a single IP bombarding your ads relentlessly? These are red flags waving in the digital wind!

2. Publisher Scrutiny

Not all websites are trustworthy allies in your advertising journey. Malicious publishers may entice your ads onto their spam-ridden pages, drowning in low-quality content. Dive into the “placements” section of your platform’s ad and meticulously scrutinize high-traffic sites. Does a website emanate a suspicious aura? Block it from your publisher list.

3. The Click-Through Conundrum

High click-through rates may initially seem like a boon, but exercise caution. If those clicks on ads fail to translate into conversions or sales, something may be amiss. Look for discrepancies between clicks and conversions, particularly from unexpected regions. Are you receiving an influx of clicks from a market unrelated to your target audience? Click fraud could be lurking beneath the surface.

4. Data Discrepancy Enigma

Keep a vigilant eye on your campaign data. Abrupt spikes in impressions coupled with a decline in page views raise suspicion. Monitor crucial metrics such as ad clicks, conversions, and impressions to uncover anomalies indicative of fraudulent activity.

Why Is Click Fraud So Hard to Eliminate?

PPC fraud is a significant challenge for businesses that rely on digital advertising, but it's not an easy problem to solve. Here are some of the many reasons why:

1. You Can’t Always Catch All of Them

Advertising networks, like Google Ads, don’t have the resources (nor the incentive) to catch all fraudulent clicks. Ad fraud is a massive and constantly evolving problem, with new methods being developed all the time. Click fraud protection requires a lot of resources, including advanced algorithms and machine learning, which can be costly and time-consuming to implement.

2. IP Blacklisting Doesn’t Always Work

The source IP addresses of fraudulent clicks often use VPNs and proxy services to mask their physical location. These clicks on ads are difficult to detect because they may come from legitimate IP addresses and look like normal traffic. They also keep changing, requiring a proactive approach and advanced techniques to stay a step ahead of them.

3. Awareness

Many businesses are simply not aware of how prevalent click fraud is, or they underestimate the impact that it can have on their advertising campaigns. As a result, they don't take the necessary steps to protect themselves. Businesses need to educate themselves about click fraud and take proactive steps to prevent it. This includes implementing click fraud software, monitoring ad campaigns regularly, and using strategies like targeting specific geolocations and ad scheduling to reduce the risk of fraud.

How to Stop Click Fraud?

Any business running PPC ads can use the following tactics to protect their campaigns:

1. Block specific IPs and ISP network ranges

One way fraudsters can carry out click fraud is by hijacking specific ranges within an ISP network. Unusual spikes in ad traffic from a particular ISP or a sudden influx of clicks from the same IP address may indicate suspicious activity. Fortunately, advertisers can identify the associated IP addresses and block the ISP's network range to prevent fraudulent clicks. In Google Ads, campaign settings allow advertisers to block up to 500 IP addresses or IP address ranges per campaign. However, blocking ISP network ranges comes with risks, as it may also exclude legitimate users. Advertisers, therefore, need to weigh the benefits and potential drawbacks of blocking IPs and ISP ranges carefully.

2. Implement micro-blacklisting or micro-whitelisting

In some cases, different pages within a publishing platform can provide varying types of traffic. Micro-blacklisting involves excluding specific URLs to block individual pages that don’t generate profitable traffic. However, blacklisted domains may be substituted by new fraudulent sites. Instead of excluding specific domains, you can compile a list of trusted domains where you want your ads to appear (known as “whitelisting”). Although this approach demands considerable manual effort, it can serve as an effective method of click fraud prevention and safeguard your campaign budget.

3. Audit paid clicks to understand what you’re paying for

Understanding your industry and conducting regular paid click audits can help protect your business from click fraud by identifying real users based on their behavioral patterns. By analyzing the digital journey of your buyers, it’s possible to identify anomalies and suspicious activity that may indicate fraudulent attacks. For example, let’s say most of your customers typically fill out a form a week after being shown an initial ad. If your business receives an influx of form submissions from users who were shown the ad just seconds before, the submission is likely to be a fraudulent attack. Regular paid click audits can help you spot false traffic patterns like these and take action to protect your ad budget

While these detective tactics can unearth click fraud, ClickGUARD offers a more sophisticated solution. With advanced click fraud detection algorithms and real-time protection, ClickGUARD’s easy-to-use software is your loyal bodyguard in the digital advertising environment.

ClickGUARD: The Best Click Fraud Protection to Your Ad Spend

The prevalence of invalid clicks in online advertising has led to the development of third-party tools and strategies designed specifically to combat this industry problem. ClickGUARD was created because Ralph Perrier, founder and CEO, was driven by his desire to know exactly who was behind each ad click, why the click happened, and what was happening after the click on his company’s website.

ClickGUARD has been optimizing advertising campaigns for clients since 2016, resulting in savings of over $1 billion for more than 5,000 satisfied customers. That is why we can guarantee to block 80% of invalid clicks.

Our industry-leading click fraud protection tool uses advanced automation to detect, block, and report all fraudulent activity in real time and avoid unwanted traffic, ensuring your budget is as optimized and cost-efficient as it can be. Our latest version is also fully automated and comes with a wide range of new and improved features, such as:

• Google Ads and Meta ads support — Now with Microsoft Ads
• A new and more intuitive user experience
• Value-focused pricing adjustments and account auto-upgrading
• Improved multi-account support
• New blacklist management features
• Improved reporting and analytics tools

So, whether you are a marketing agency managing multiple client accounts or a business owner running your ad campaigns, ClickGUARD can help get the most out of your advertising budget by getting more conversions from real, legitimate clicks.