What is this click fraud that is costing Google billions?

Types of Click Fraud

You may be starting to get an idea of why a person or a company would commit click fraud. Network click fraud is the most common type. When a company commits network click fraud, the idea is to fraudulently increase the money it makes as part of Google's ad network. If a partner publisher were to generate false clicks on an ad, it would get paid a lot more money by Google than if it relied solely on clicks by people actually interested in that ad. And while it may seem like Google would profit from this type of click fraud, too, because the advertiser would be paying Google for each of those fraudulent clicks, the overall results are actually bad for Google. Click fraud degrades the quality of its advertising network. The value of a network ultimately lies not only in its ability to generate ad views and clicks, but also in its ability to generate productive clicks. The more clicks that don't result in a sale or even an inquiry, the lower the quality of the network and the less Google can charge for its keywords. Google has filed at least one lawsuit against a partner publisher for alleged network click fraud.

The other main type of click fraud is more malicious. Competitor click fraud targets a specific company's ads, generating false clicks in order to run up that company's Google marketing bill. The idea is to deplete a competing company's marketing budget. If we go back to our theoretical cost-per-click of $40, just 30 fraudulent clicks in one month -- a single click a day -- adds up to $1,200 flushed down the toilet. None of those clicks even had the potential to result in a sale. For a small business with a limited marketing budget, $1,200 a month in click fraud could mean the end of its advertising ability or the end of the business entirely. If the scheme succeeds, the competing business wins the market by click fraud.

So how do you know if you are a victim of click fraud? See the next page to find out.