Click Fraud NT 1110 Computer Structure and Logic ITT Technical Institute 11/16/2013 First let me explain what pay per click advertising is. Introduced in 1998, business owners purchase links on search engines or on sites that employ search engine ads, they only pay for their ads when a potential customer clicks on the advertisement link. Fees vary considerably from as little as one cent to $25. Pay per click advertising is much cheaper than paying upfront for commercials and billboards and can reach many more potential customers. The two biggest publishers of these ads are Google and Yahoo. People take advantage of the pay per click advertising by republishing the ads on other web pages. While this is not illegal, it opens the door for anybody to set up a fake website to publish the links or ads, these ads contribute to click fraud by allowing these fake publishers, acting as middlemen, to share revenue with Google or Yahoo. Usually this is such a small con that most companies won’t go through the trouble of prosecuting because the court expenses would most likely be more than the settlement. The advertising network that publishes your advertisements may also commit click fraud to make more profit. They are often paid more if they can secure more clicks on the ads they display. Some publishers may dishonestly click on the ads or even employ third parties to click on the ads. Many of these third party click fraud operations are outsourced to countries such as India, Ghana, Morocco, Nigeria, Romania and Russia. Bots, automatic software, can scan web pages on Facebook, Yahoo, Google and other hosting sites in order to collect information contained on the site. In this process the ad links may accidentally be clicked on causing click fraud. Individuals who are trying to make a big profit from this fraud may use bots to trick the company into believing the clicks come from different computers or even different countries. The disgruntled employee dissatisfied with their job, working conditions, or salary can “get back” at their employer by searching the internet and clicking countless times on the ads in order to use up to use up the advertising budgets. In doing this, not only are you losing your ad budget but also losing potential customers. Your competitor can search for and click on your ads to use up your daily or monthly budget. Also people new to pay per click advertising can frequently check the search engine results to see if their listings show up. More often than not they will find a competitors ad in front of theirs and click on the ad out of anger that they didn’t get the better spot. When the fraud and loses are small most companies won’t prosecute but, in the case of large loses class action lawsuits have been filed. In 2005 Google sued a middleman company called Auction Experts and won $50,000. Even though Google claimed that they do not charge advertisers for invalid clicks, throwing out about ten per cent of clicks every quarter costing them over $100 million per year, they found themselves at the center of a class action lawsuit. Google settled the click fraud suit in July 2006 for $90 million, $60 million in ad credits to claimants and $30 million going to the plaintiffs’ lawyers. Frequently reviewing your statcounter for patterns and trends can help you determine if you’re a victim of click fraud. Repeated visits from the same IP address could be legitimate for example: different people from one organization, or a frequent shopper. But it could also indicate a competitor repeatedly clicking on your ads. Looking at the time spent on your site can also help. If bots are responsible, they generally spend a very short amount of time on the site. Some companies choose to outsource their pay per click advertising to a professional management company. This will cost extra money on top of your ad budget but it could help you get the most out of your campaigns and cut out click fraud.

Works Cited
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Ellis-Christensen, T. (2013, 10 14). What is Pay Per Click Advertising? Retrieved 11 04, 2013, from WiseGeek: http://www.wisegeek.com/what-is-pay-per-click-advertising.htm

Kameir, C. (2010). Click Fraud Report. Retrieved November 04, 2013, from Kameir.com: http://kameir.com/click-fraud-report/

Kameir, C. (2010). Click Fraud II – A $250M/year industry. Retrieved November 04, 2013, from Kameir.com: http://kameir.com/click-fraud-ii-a-250myear-industry-2/

Carlos, S. (2012, August 2). Is It Time for Facebook Advertisers to Conduct Click Fraud Sudits? Retrieved November 04, 2013, from Marketing Land: http://marketingland.com/is-it-time-for-facebook-advertisers-to-conduct-click-fraud-audits-17887

Admin. (2008, November 5). Click Fraud – Don’t be a Victim! Retrieved November 4, 2013, from StatCounter: http://blog.statcounter.com/2008/11/click-fraud-dont-be-a-victim/

Kerr, N. (2008, September 26). Do You Suspect Click Fraud? Here’s a Simple Solution…. Retrieved November 4, 2013, from Koozai: http://www.koozai.com/blog/pay-per-click-ppc/do-you-suspect-click-fraud-heres-a-simple-solution/