Click fraud has been an ongoing problem in the online advertising industry, especially for advertising programs such as Google Adwords.
Click fraud occurs in two major forms according Shuman Ghosemajumder, Business Product Manger for Trust and Safety at Google. Click fraud occurs when an advertiser is trying to harm a competitor by clicking on their ads, or when a Google Adsense publisher try to inflate their revenue through false clicks.
Fraudsters deploy different techniques when committing click fraud. Some are simple techiques such as manual clicks, to more sophisticated methods with botnets to commit click fraud. There are also organizations that hire individuals to click on advertisement as part of click farms.
Google deploys several techniques to detect click fraud. Some of these are done with simple rules, where certain clicks are classed as invalid. These are marked invalid in real-time and fit a profile of what Google considers as invalid behaviour. This may be as simplistic as detecting excessive repetitive clicks.
These types of clicks are determined invalid and are automatically discarded.
In addition to these simplistic real-time rules, Google deploys advanced statistical anomaly detection, a more powerful click fraud detection method. These advanced methods of detecting click fraud factor in over 100 different elements.
Google has estimated that there have been less than 10% of the clicks generated as invalid. Of those clicks, less than .02% of those are marked invalid reactively when advertisers contact Google expressing concerns over click fraud.
To protect themselves, advertisers can examine their return on investment (ROI) and tracking their results. The many pay-per click models such as Google Adwords allows advertisers to collect enormous amounts of data and run experiments to determine where they are getting the best results for their advertising dollars. This allows them to establish benchmarks and track their ROI over periods of time. When an advertiser sees their ROI drop for unexpected reasons, it may indicate undetected click fraud.
Visiting DigitaPoint Forums, the Google Adsense area is filled with people complaining about being banned from the Google Adsense Publisher program. One of the top reasons for being banned from the Google Adsense program for new publishers is click fraud. Many new publishers find it tempting when each click generates revenue.
Committing click fraud is not worth being banned either as an advertisor or a publisher. Programs such as Google Adwords and Google Adsense have potential to dramatically increase the success of any online business if used correctly.