Digital advertising has become the most lucrative fast track for businesses over the past decade. Among the various forms of digital advertisements, pay-per-click (PPC) ads are one of the most popular formats that brands invest in to enhance their revenue and brand awareness. In the PPC ads model, the publisher gets paid every time one of the advertiser’s ads is clicked on.

The click price of a PPC campaign fluctuates due to multiple factors, including the competitiveness of your industry and product, as well as your audience’s level of awareness. During the sales season, the cost of a PPC campaign could increase by tenfold due to heightened competitiveness. Although the cost of PPC ads is rising because the most-searched keywords are being targeted by huge enterprises, there are some tips on using similar keywords that can help startups boost their exposure with limited budgets.

Unfortunately, the substantial increase in investment in online advertising has brought forth significant challenges, including illegal activities such as click fraud—a specific subcategory of advertising fraud. Click fraud is defined as the creation of fake traffic by a group of people or automated click bots, carried out by fraudulent click operators to generate illegal profits.

The fake click traffic disrupts e-commerce businesses’ marketing analysis by generating clicks with no interest in the products or services. Simultaneously, it consumes a significant portion of the marketing budgets. A study from University of Baltimore estimates that by the end of 2020, PPC click fraud reached USD 23.786 billion. On the other hand, approximately 45% of online traffic is brought about by click bots. This indicates that half of the paid advertising budgets could be exhausted by invalid clicks when implementing paid digital distribution without click fraud protection services.

The terms the webshop owner needs to know about click fraud protection include:

Click Bot – A kind of web-bots which can mimic the mouse movement and creating human-like click-path pattern.

Pay-per-click (PPC) – PPC advertisement is an online advertising model. The advertisers pay a fee each time one of their ads is clicked. It is a way of buying visits to a website rather than attempting to earn those visits organically.

Click Fraud (Malicious click) – The most common e-commerce fraud. It often can be conducted by human clickers (Crowd clicks) or click bots (Automated Clicks), increasing competitors’ advertising expense by interrupting their PPC advertisement.

Crowd Click Fraud – The Fraudster hire a group a people conducting fake clicks to bring invalid traffic to the competitor’s webshop/website, at the same time exhausting their digital marketing budgets.  Crowd Click Fraud is not considered the primary method of conducting click fraud, as it is comparatively more expensive than using click bots.

Automated Click Fraud – It involves fraudsters using automated click bots to generate invalid clicks on a competitor’s paid advertisements. This type of click fraud is prevalent in the e-commerce business.

Impressions – Impressions represent the number of times an ad is viewed. In the context of click fraud, fraudsters may artificially inflate impression counts to make campaigns appear more successful.

CTR (Click-Through Rate) – CTR is the ratio of clicks to impressions, expressed as a percentage. Click fraud can artificially inflate CTR, leading to misleading performance metrics.

Conversion Fraud – Conversion fraud occurs when fraudsters manipulate conversion tracking by generating fake or irrelevant conversions. This can mislead the advertiser into thinking their campaign is more effective than it is.

Ad Fraud – Ad fraud is a broader term encompassing various fraudulent activities related to online advertising, including click fraud. It can involve deceptive practices that compromise the integrity of digital advertising campaigns.

Click Fraud Protection and Monitoring Tools – These are tools and software solutions designed to monitor and detect click fraud. Webshop owners should be aware of such tools to proactively protect their advertising investments.

Reference: [1] Cavazos, P.R. The Economic Cost of Invalid Clicks in Paid Search and Paid Social Campaigns. 9. 2020.