Pay Per Click Fraud: How Does it Affect Your Campaigns and by How Much?

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Pay per click is one of the most effective and groundbreaking marketing techniques ever created. That’s when everything goes right, of course. However, the very nature of pay per click opens it up to the very real reality of pay per click fraud. Still, many businesses tend to overlook that fact and don’t think that it’s a serious issue. That’s until their clicks stop converting, and they have no idea why. Let’s take a closer look at pay per click fraud, what it is, how much it affects campaigns exactly, and some solutions to safeguard your campaigns against it.

What is Pay Per Click Fraud?

You may have heard about PPC fraud under a different number of names. It’s often referred to as click fraud, click bot attacks, invalid clicks, and ad fraud. There are also other techniques such as click injection, click spamming, and click spoofing that all use complex processes to steal your ad dollars.

If you want to learn more about Pay Per Click fraud, ClickGUARD have put together a comprehensive guide that covers everything you need to know. In it, they run down a brief history of PPC advertising and its evolution over the years. They then touch on specific attacks and how to identify them. The blog also stresses the importance of audits and what recourse you can have against attackers.

How do PPC Attacks Work?

If you ever fall victim to PPC fraud, it will usually be caused either by a human or a machine. You have repetitive click attacks that are often committed by humans. This could be a disgruntled employee who wants to hurt you in some way, or it could be an unhappy customer or someone who wasn’t treated fairly trying to affect your bottom line. 

Things can also get really dirty when you start looking into organized click campaigns. If someone wants to cause significant damage to your business, they could use a click farm and have people send traffic to a specific ad over and over in exchange for a fee.

Then you have bot attacks; bots have evolved greatly over the years, and are very good at imitating real-life visitors nowadays. This is why they can be so difficult to identify and catch. In many cases, people will use bots to click on ads in order to cash in the ad revenue on their website. Some will use bots to inflate their numbers. Even ad networks will sometimes use bot traffic to make a site more attractive than it actually is.

Where the true danger lies for you is when these are used to launch malicious attacks. However, we should say that the large majority of bots aren’t used for fraud. Many websites will use bots for a variety of reasons, like for testing, for instance. Still, it is estimated that around 25% of all traffic online is generated by fraudsters either directly or indirectly.

My Business Can’t Possibly be Affected, Can it?

For some reason, a lot of people may assume that because they’re in a relatively small niche, fraudsters won’t bother to attack them. But in reality, they might be some of the most vulnerable to these types of attacks.

Some of the most affected by click fraud are people who are in small niches with lots of competition. Think of tradespeople like plumbers, locksmiths, and general contractors. Another area where click fraud is surprisingly highly prevalent is health services. You’ll see everything from orthodontists, vets, and other specialists use click fraud to cut down their competition.

Click fraud can be very tough for on-demand business, like plumbers for instance. People who look up these types of businesses usually need immediate help and have a very high purchase intent. This is why it will make sense for a plumber to pay $40+ for a single click. This is also why it would make sense for a competitor to spam these ads to sink their budget, no pun intended.

In one case, in particular, an Australian waste disposal company had orchestrated a widespread PPC attack on its competitors in the region. What it took was the coordinated efforts of multiple business owners who all used fraud detection tools to catch the culprit. If it wasn’t for this effort, they could’ve easily gone under the radar with other companies wondering why they can’t get any results from their campaigns.

What About Others Businesses?

So, you’re a small startup thinking of advertising on Facebook, placing a banner ad somewhere, or putting up a YouTube ad. Well, guess what? You’re a prime target as well. 

Anywhere you run ads on Google, Bing, or Facebook’s increasingly large portfolio of sites and businesses, you are at risk. This also includes advertising companies who manage PPC campaigns for their clients.

The Real Impact of PPC Fraud

While the losses are monetary in nature, there are tons of other different ways that PPC fraud could end up hurting your business. For one, the time lost trying to get a campaign off the ground could have been used towards something more productive. You could also find yourself neglecting other marketing methods like SEO and losing traction as a result. Even if you get your ad money refunded, irreversible damage may have already been done.

A lot of startups rely heavily on PPC for things like product launches, for instance. You can already imagine what the effects of PPC fraud could be there – thousands of dollars lost in an ineffective campaign, and a possibly ruined product launch. This is why the real damage of PPC fraud can be so difficult to estimate.

How Much Can PPC Fraud Cost My Business?

This will depend on many factors, but the most important ones will be your ad spend and industry. However, you should know that if you participate in PPC in any way, chances are, you’ve been and will be affected by click fraud.

According to one executive, it is estimated that around 4% to 20% of all the accounts they manage are subject to some kind of click fraud. It can be tough to come with an average dollar number as some may spend $1000 per month on ads, and someone else might spend $50,000. You even have law firms out there spending in the hundreds of thousands in PPC every month, so you see how much damage could be caused here.

If you want to get a rough estimate, then someone with a $20,000 budget might expect to spend around $3000 on fraudulent clicks.

What Can I Do to Prevent Click Fraud?

Well, the first thing you should do is start looking at fraud prevention software. These types of software will often assign a certain ID to every device used to make a fraudulent click. So, even if the attack is coming from a different IP address, you will still be able to spot a pattern. 

These systems will also have a blacklist of fraudulent sources that you’ll be able to block. The best tools will allow you to check activity across all campaigns, check the ones that have been the most affected, and various other valuable metrics you can use to stop attacks and catch perpetrators.

Now that you know a bit more about PPC fraud, it’s your responsibility to go out there and take the steps necessary to protect your campaigns. Just one attack could have disastrous consequences, so don’t take it lightly.

SDR Team

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