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Protect Yourself from Click Fraud

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Like newspapers and magazines, Web sites display ads because advertisers pay for the use of that space. But the pay-per-click model has some troubling repercussions. Eric Giguère explains how "click fraud" is cutting into ad revenues and creating problems even for the seemingly all-powerful Google.
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Pay-per-click (PPC) advertising is a popular model for monetizing web content. The idea is simple: You rent space on your web or blog pages to an advertising service; the service displays advertisements in that space; as a reward for directing traffic to the advertiser's site, you get a cut of the money the service makes when visitors click those ads. The advertiser pays—and you make money—only when the ad is clicked. Google's AdSense program is the best-known and most popular pay-per-click advertising program, but it's not the only one—the Yahoo! Publisher Network (YPN) is another example. With PPC, even smaller niche sites can make money from their content, as automated systems like AdSense and YPN make it cost-effective for advertisers to deliver their ads to all types and sizes of sites across the world.

The biggest flaw in PPC advertising programs is that they're susceptible to a form of fraud known as click fraud that harms the advertisers, the advertising services, and the sites hosting the ads. This article explains what click fraud is and what you can do to protect yourself from its effects.

Three Kinds of Click Fraud

Broadly speaking, click fraud occurs when someone deliberately clicks a pay-per-click ad with no intention of actually visiting the advertiser's site. There are three common kinds of click fraud:

  • Enriching click fraud. Most click fraud is an attempt to make money for the person or persons committing the fraud. They create web sites, join a PPC service like AdSense, and then proceed to click the ads (often through intermediaries or automated means) in order to increase their earnings.
  • Depleting click fraud. Sometimes click fraud aims merely to deplete an advertiser's ad budget. Because an advertiser pays each time an ad is clicked, competitors or even disgruntled customers may click the ads solely to cost the advertiser money.
  • Disbarring click fraud. On rare occasions, click fraud is directed against the site hosting advertisements and not the advertisers themselves, though it still causes grief for the advertisers. This is done in order to get the site banned (disbarred) from the advertising service due to invalid clicks.

The click fraud type rarely matters to the advertisers, though, since they lose real money with each undetected fraudulent click. Advertising services also care about click fraud: While they may make money from click fraud in the short term, they stand to lose out in the long term if advertisers abandon it due to rampant click fraud.

Site owners, on the other hand, may or may not care about click fraud, especially if they're the ones instigating or committing the fraud in the first place.

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