What is advertising click fraud

Whenever the word fraud is mentioned, red flags all around go up. Click fraud is one of the many ways that fraudulent activity has infiltrated the internet and technology age. Like most forms of fraud, financial motives lie behind click fraud. But what is click fraud and why do people do it? If you advertise online, own a website, or rely on revenue from online sources then you need to learn about click fraud. Thousands and thousands of dollars are lost every year due to click fraud, costing advertisers, businesses, and individuals more than just pocket change while destroying confidence in ad relevant programs such as Google Adsense and Yahoo ads.

Basically many websites earn revenue by allowing advertisers to post ads on their sites. With the creation of programs like Google's Adsense; the ability for anyone to create a website and host advertisements on it has skyrocketed. Most ad revenue sharing programs split revenue between the company that hosts and runs the ad software and the website owner. Advertisers spend millions every year advertising on the web and every time someone clicks on their ad they pay. In a way this idea of paying only when your ad is clicked on should have saved business a lot of money and allowed anyone to advertise anything on any budget.

Instead this spawned the world of click fraud where clicks on ads are generated artificially. Most of the time the reason for someone to engage in click fraud is for financial gain. With the rise of sites hosting ads linked to a revenue sharing system, there has been more temptation of those website owners to get as much money as possible from the ads. They may click on the same ad over and over again, create programs that generate fake clicks, or enlist people to click on various ads. Also with the rise of freelance writing and the ability to get a share of ad revenue by posting one's content on sites with ads has come more motivation to increase the amount of ads viewed and clicked on.

On a larger scale, groups of people and even organized crime may get involved by creating programs that take over thousands of PCs around the world to generate millions of fraudulent clicks on hundreds of websites hosting ads that the group will profit from when clicked on. Most computer owners whose machines have been hijacked for this money making scheme have no clue, and the sheer number of computers involved can make it impossible to track down click fraud set ups.
Besides financial gain, click fraud has also been used in the heat of competition. It is no longer unheard of to hear of a site or business's competitor from engaging in click fraud on their site in hopes of making it seem like the honest business is clicking on ads excessively for their own gain. Click fraud is against the terms of service for most ad sharing programs and web hosts, so competitors may seek to get their competition knocked out of the online marketplace.

Click fraud is a growing concern and companies that develop and maintain ad revenue sharing programs claim to always be working to limit the damage done by click fraud. Sites with excessive clicks on certain ads relative to site traffic are investigated and revenue sharing accounts that seem to be bringing in money on suspicious clicks are looked into. Some companies have gone as far as to refund advertiser money on clicks that may have been done fraudulently. However it is impossible to catch every fraudulent click and many small time click fraud operations (such as an individual with a personal blog that hosts ads which they click on to boost earnings) go undetected. One problem here is that it is sometimes hard to determine is a click is an intentional legitimate click, fraudulent click, or accidental ad clicks.

Of course the chance of getting caught does still exist and many web host services, ad revenue sharing programs, and even ISPs will permanently ban individuals who knowingly engage in click fraud. For most people, risking their online privileges is hardly worth the extra few pennies or dollars a month they might get off clicking ads hosted on their own sites. But for organized crime and those with a lot of experience with creating automated click generators, the damage done to businesses paying for advertising and to the credibility of revenue sharing programs is far reaching. Money wasted on ad views and clicks that led to no business is money they need to be made up. Rising prices, decreasing business expansion, and reducing company size are all possible reactions for a business that has been victimized by click fraud operations.