Click Fraud

Dennis Faas's picture

Click fraud is a type of Internet crime that occurs in pay per click online advertising.

How Click Fraud Works

A person or automated computer program imitates a legitimate user clicking on an ad online a web site. The ad is clicked for the purpose of generating a charge (per click) to the advertiser.

Click Fraud with respect to PPC Advertising

Pay per click (PPC) advertising is an arrangement in which web sites ("publishers") display clickable ads from an advertising network in exchange for revenue earned for each ad clicked.

Each time a (believed to be) valid user clicks on an ad, the advertiser pays the advertising network, who in turn pays the publisher a share of this money. Unfortunately, this revenue-sharing system is often abused with click fraud.

Click Fraud: A Felony

Use of a computer to commit this type of fraud is a felony in many jurisdictions. There have been arrests relating to click fraud with regard to malicious clicking in order to deplete a competitor's advertising budget.

How Click Fraud Benefits The Advertising Network

The largest of the advertising networks, Google's AdWords/AdSense and Yahoo! Search Marketing, act in a dual role, since they are also publishers themselves (on their search engines).

According to critics, this complex relationship may create a conflict of interest. For instance, Google loses money to undetected click fraud when it pays out to the publisher, but it makes more money when it collects fees from the advertiser. Because of the spread between what Google collects and what Google pays out, click fraud directly and invisibly profits Google.

This document is licensed under the GNU Free Documentation License (GFDL), which means that you can copy and modify it as long as the entire work (including additions) remains under this license.

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