What is Click Fraud and Why Should Dealers Care?

clicking on an ad

The day-to-day business of running advertising campaigns can be complicated and time-consuming. You worry if your messaging will be effective, if you’ve targeted the right audiences, what kind of ROI you might realize, and more.

The last thing anyone feels like dealing with in such an environment is black hat shenanigans, but unfortunately no industry is safe from fraud. In fact, ad fraud is now the second-largest organized criminal enterprise in the world behind the drug trade and is expected to cost advertisers more than $50 billion globally by 2025.1

The biggest offender? Click fraud.

What is Click Fraud?

Click fraud has to do with fraudulent activity targeting your Pay-Per-Click (PPC) ad campaigns. As a refresher, PPC refers to ads – typically run on a major search engine or ad network – for which you pay a fee every time the ad is clicked. They work well as a supplemental strategy to driving organic traffic to your website.

Click fraud refers to falsely inflating the number of clicks on an ad and it usually occurs in one of two ways: either your competitors sabotage you with repeat clicking to drive up your cost-per-click and waste your ad budget, or the owner of the website or app your ad is displayed on is looking to boost their own revenue artificially.

You can see why this would be a problem! On the one hand, you’ve got competitors resorting to dirty techniques to try and blunt the effectiveness of your ad campaigns, and on the other, you’ve got owners of websites in an ad network outright stealing from you.

And, while these scenarios might sound farfetched, they’re anything but. Going all the way back to 2006, tech giant Google had to shell out nearly $100 million in credits due to click fraud on its platform. And just last year, Facebook filed a lawsuit against two app developers for click fraud on its platform.

There are also long-lasting ripple effects to consider, such as the distortion of the data you’re pulling from the affected PPC campaign, rendering it far less useful than it normally would’ve been.

So, if you’re running PPC campaigns (as you should be) and you’re concerned about click fraud sapping your revenue potential and profitability, how can you fight back?

Preventing Click Fraud

The good news is, once you’re aware of click fraud as a threat to the viability of your PPC campaigns, there are steps you can take to prevent it.

First of all, you’re going to need the capability to do some basic tracking and reporting, whether it’s in-house, through the ad platform itself, or through a third-party partner who manages that relationship for you.

Specifically, your reporting needs to provide every click’s IP address and click and action timestamps. With this info, you can figure out the device doing the clicking (and, with some additional research, who it belongs to), the time they arrived on your site after clicking the ad, and the time when that person completed an action on your site. If you see a bunch of click timestamps but no action timestamps from the same IP address, there’s a good chance you’ve spotted click fraud.

What then? The most direct action you can take is to set up IP exclusions to block your ad from being served to that IP address ever again, effectively eliminating any click fraud originating from that device for as long as you block them.

If you suspect a specific competitor as the culprit, or even a “click farm” based out of another country, you can also adjust your ad targeting to exclude certain geographic regions down to the level of city and zip code, ensuring your ads will no longer be served to the would-be saboteurs.

Click fraud is a serious issue and like so many other forms of cybercrime, it’s only expected to grow in the coming years. But, you don’t have to be a victim. Remember what to look out for, monitor your PPC campaigns (or entrust them to a proven vendor partner), and know the steps to fighting click fraud if and when it does happen.

You’ll be busting the bad guys before you know it.

1 Business Insider