How Can Click Fraud Affect Your Business

Click fraud is a known term among pay-per-click (PPC) experts and digital marketers. It’s one of the common obstructions to running your successful PPC campaign. As a business person, your goal is to maximize your ad budget’s expenses by promoting ads to the right audience. Click fraud is one of your biggest obstacles as it makes you pay for clicks from robots and deceitful sources. 

So, what is click fraud?  How is click fraud affecting your business?  Read on to find the answers.

What Is Click Fraud?

Click fraud is the illegal manner of clicking pay-per-click (PPC) advertisements multiple times to increase site revenue or consume advertising budget. It occurs when a human or bot clicks on ads, acting as a legitimate user, but with no intention of making a purchase. Click fraud can also sometimes be operated by a site’s owner to boost ad revenue artificially.   

Click fraud is also the act of clicking on an online advertisement, usually with indigenous and malicious intent. This attempts to divert the ad spend to a third party or fraudster, or remove the advertisement from the search engine results.  

Fortunately, online schemes like this one can be detected and prevented through various means, including the use of reliable click fraud software or specialized monitoring software that can identify oddities and suspicious click activities.

How Does Click Fraud Work?

Now that you know what click fraud is, it’s time to get familiar with how it works. There are various ways to execute click fraud. These include:

• Business Competitors

Competing businesses may click on each other’s advertisements to waste each other’s ad budgets. By the time you reach your click ad limit, it will be taken down, leaving your competitor with the benefit of ranking first. That’s why if you conduct detailed research, you may be able to identify competing businesses’ IP addresses. If you can, you’re entitled to blacklist these specific IP addresses to minimize these fraudsters.  

• Click Farms

Some businesses hire an organization full of people whose task is to click on ads for various reasons. These are used to maximize traffic volumes on websites or boost the popularity of social media profiles. However, the clicks aren’t from potential buyers, but they’re usually from real people. This is what you call click farms, which are a combination of bots and real people.

• Automated Programs (Botnets)

Possibly the biggest criminals of click fraud are robots. These malicious computer programs (botnets) automatically browse the Internet and carry out clicks, attempting to pass as human.  

No matter what the purpose of conducting click fraud is, the losing party is the business paying for the advertisements. Advertisers only want potential buyers to click their ads, and each case of click fraud only makes advertising more costly.

How Can Click Fraud Affect Your Business?

Click fraud can be extremely inconvenient for business publishers and advertisers, especially when several businesses operate on an incredibly tight budget.

Here are the top effects brought about by click fraud on your business:

• High Bounce Rate

There can be plenty of factors that make a visitor click on your link and then click back out within a few seconds. It may be due to the slow loading time of your landing page, the site is poorly designed, or there are too many page ads that redirect to other websites if clicked unintentionally.   

For PPC ads, a fair bounce rate is around 40-50%. If you detect bounce rates lower than that, that is a positive thing. Anything over 60-70% implies you may need to review your ad’s performance. If this doesn’t change anything, start investigating how to stop those invalid clicks as it may be due to click fraud from deceitful sources and robots. 

• High Traffic But Low Conversions

Click fraud speeds up your click-through rate, where your conversion rate is usually based. Getting many clicks without customers making any sales or purchases reflects a low conversion rate. You may think that lots of clicks will equal lots of conversions. But, with click fraud, that’s not necessarily the case. If you often see a low conversion rate, it may be worth checking your ad first. 

• Wasted Advertisement Budget

Click fraud immediately drives up your advertising costs if not fixed for a long time. While some publishers declare that they can detect click fraud, it still can’t stop 100% of it. The rest only becomes a lost investment for you.

• Distorted Campaign Data

An indirect but enormous cost to advertisers is how click fraud distorts your campaign data. Click fraud drastically affects the accuracy of the data that businesses base their decisions on regarding sales, production, reached target audience, and more. Such fraudulent acts result in inconsistent and inadequate data for advertisers.

How To Prevent Click Fraud

It’s clear now how click fraud harms advertisers and publishers, like Google. Since advertisers are only interested in paying for real visitor clicks, PPC platforms bear the responsibility of identifying and reducing click fraud.  

Publishers are doing their role when it comes to click fraud prevention measures. From your side, here are practical steps you can take to identify and address click fraud: 

• Monitor your metrics closely. See if there are any sudden spikes in your campaign activities, as well as ad costs. It is unusually peculiar when your ad metrics don’t match your current PPC strategy. 

• Limit your ad exposure. You can control your ad reach by targeting your ad campaigns to limited and precise locations only. This will prevent potential click fraud offenders, who are usually from unusual locations or developing countries, from harming you.
• Examine your traffic sources. The only way to have complete control in directing your costs away from the threat of click fraud is to monitor the situation yourself. Don’t depend on Google or any other search engines you advertise on to investigate your page’s traffic.

Bottom Line

If you think there’s an existing fraud in your ads, take measures to extinguish them. Make sure you monitor any invalid clicks and enlist click fraud software to minimize the damages. The more careful you are, and the more time you spend on fraud protection, the more valuable ad traffic will be and the higher the chances of conversions.

So, keep the things mentioned above in mind, and you’ll be able to protect your business from the negative effects of click fraud.