Click Fraud Detection: How Does It ACTUALLY Work?

January 12, 2021
by
|
8 min
 reading time
Tired of reading? Then listen to this post:

By now, it should be well understood that click fraud costs advertisers billions of dollars each year -- and as such, click fraud detection is absolutely mandatory. 

In a nutshell, click fraud depletes your ad budget without giving you any return for your business, stifling sales, and hindering your business growth. Figuring out how to prevent click fraud stems from finding it, which is precisely where click fraud detection comes into play.

The last thing you want to do is shut out real people and potential customers from accessing your business. Unfortunately, many of the hands-off methods to prevent click fraud run a rampant risk of that. Meanwhile, Google Ads in-house methods are applied so broadly that they risk the same.

If you’re new to online advertising and not sure how click fraud detection actually works, this article is for you. We’ll quickly go over what click fraud is and how ClickGUARD’s click fraud detection algorithm works. 🚀

What Is Click Fraud and Click Fraud Detection?

Click fraud is often grouped with invalid clicks, even though the two are entirely different. Google combines them with its click fraud detection measures.

Invalid clicks are accidental, like when someone double clicks on an ad or clicks on it by mistake when scrolling on mobile.

Fraudulent clicks instead have malicious intent to prevent people from seeing your ads. These include:

  • Manual or automated clicks meant to increase advertising costs or stop their advertising altogether.
  • Manual or automated clicks meant to increase profits for websites that host your ads.

Click fraud detection uses an algorithm to find inconsistencies in your click rates that indicate malicious activity. The algorithm gathers and analyzes your data to find out when and how your clicks happen.

Certain signs of malicious activity are more obvious, like, for example:

signs of click fraud

When these occur seemingly without cause, it’s a significant indicator of a malicious attack on your ads.

Types of Click Fraud and Click Fraud Detection

Competitors sometimes resort to click fraud to boost their own revenues, especially in competitive industries. Click fraud is split into 2 main types:

  • Manual, where you have people repeatedly clicking on your ads
  • Automatic, where bots search and click on your ads based on their programming

There are click fraud detection measures in place to search for both of these main types. They both have their own quirks and nuances

Manual Click Fraud

Manual click fraud is when you have a person repeatedly clicking on your ads to cost your ad budget useless money. 

There are two ways this can happen:

Small-Scale Attacks

On the small-scale, this can be a competitor telling its employees to go out and click on all your ads. Angered or disgruntled employees can do similar things. And this is why, kids, you really need to split with your former employees on good terms. OK, this and other things 😉

Fortunately, small-scale attacks are either unlikely or easily caught. Click fraud detection in these instances is usually as simple as finding and blocking the IP address they’re coming from. When it reaches significant enough levels, Google’s AdSense will recognize it and suspend the malicious accounts.

Large-Scale, Organized Attacks

While small-scale attacks are simple to deal with, there are malicious organizations that conduct click-fraud-as-a-service. These usually take the form of, drum roll, Click farms

Click farms mostly hire low-wage workers to sit at a computer and click on ads or generate fake likes and followers on social media all day (fun job, right?). 

They’re far less cost-effective than using bots since human labor is more expensive and slower. Plus, at some point, people will inevitably flock to social media and take their clicks there. However, manual large-scale click farms are also  much more difficult to track because they have fewer of the tell-tale signs of fraudulent clicks. So you can see why some companies might be tempted to buy into this. 

Automatic Click Fraud

Automatic click-fraud uses bots to crowd your ad traffic. It’s a more efficient and scalable means of conducting click fraud. One thing that makes them obvious is where they are and how they interact with your sites. These signs include:

automatic click fraud

Bots are increasingly becoming more sophisticated and better able to mimic human behavior. This makes them harder to detect, but it doesn’t mean they can’t be detected. Unfortunately, it requires advanced visitor behavior tracking to do so.

A collected group of bots that target advertising or conduct other nefarious goals is called a botnet. These are often used alongside click farms or as standalone entities.

Top 5 Myths in the Click Fraud Detection Industry

Despite the growing prevalence of click fraud, it’s still outside of mainstream public perception. That’s not to say that people aren’t aware of it, but that they don’t have a realistic understanding of it. It hasn’t been a top concern since around 2007, but bad actors are increasingly capable. In late 2018, 8 men were charged with running an organized ad fraud scheme.

Due to this, many misconceptions about click fraud have become rampant. Common myths include:

Myth 1: Click fraud isn’t a huge problem and won’t affect me

Unfortunately, click fraud is far more widespread than many people realize. Because bots and click farms have increased their sophisticated techniques, it’s also often difficult to notice on your own. That means it can affect you without you noticing. 🙈

Myth 2: Google Ads is effective at stopping fraudulent clicks

We’d love to believe that, but nope. 

Google Ads is so standardized that their preventative measures will often flag real people and potential customers as suspicious. Google also deals with clicks retroactively by refunding you for your ad budget. They can’t proactively address the issue to keep your ads up, which hurts your business disproportionately by not alerting potential customers to your presence.

It’s in Google’s interest to inflate the effectiveness of their click fraud detection, since they make money from the number of clicks that occur. That’s a direct conflict of interest on Google’s part.

Myth 3: You can block click fraud yourself using simple methods

Standard methods, like blocking specific IP addresses or ISP ranges, or micro-blacklisting users, can stop fraudulent bots but will also stop legitimate customers from reaching your site.

Other methods like running daytime campaigns shut out click farms from across the world from being able to interfere with your campaigns.

These are unfortunately small-scale fixes to potentially large issues. More involved methods, like auditing clicks yourself, are time-consuming and detract from focusing on your business.

Myth 4: Your ad campaign is too small to be hurt by click fraud

Regardless of how big or small you are, you can be targeted by click fraud. Many botnets target specific industries to suppress competition. If you’re in the finance, family, food, or service industries, which are notably competitive, you’re more at risk. A 2014 White Ops study found that:

essential click fraud statistics

Bots are able to target any company based on their services without being the specific target of an attack campaign.

Myth 5: Preventive software isn’t worth the expense

Preventive software might seem like an added expense, but it saves you money by not wasting ad spend. It also proactively detects click fraud, saving you money upfront, and ensuring your metrics and analytics data is as accurate as possible. In the long term, that makes you more money by allowing your ads to reach more customers and make more conversions.

Our software will make your advertising strategies more effective. We’re confident of that, and to make sure you see it for yourself, we offer a 7-day free trial.

How Click Fraud Detection Actually Works

Regardless of how sophisticated bots and click farms are, there are still methods of detecting them. Our click fraud detection algorithm collects more advanced information to determine more accurately which clicks are legitimate or not.

Common signs that the algorithm searches for are:

  • Sudden spikes and anomalies in your data with no recognizable cause
  • Analysis of IP addresses, click timestamps, and action timestamps

It collects and combs through your data to create an analysis of your data. It flags any outright fraudulent activity and blocks it. If the algorithm isn’t completely certain that activity is fraudulent, it flags it as suspicious for you to address yourself. After all, it’s better to err on the side of caution instead of blocking potential customers from interacting with your site.

While it’s impossible to eliminate all fraudulent clicks, you’ll be able to cut down on the vast majority of them. Algorithms are also regularly updated to adapt to the changing trends and tactics used by cybercriminals.

Conclusion

Click fraud detection is an increasingly important investment, not only to keep your ads secure but to ensure you have the most accurate analytics data. Paid preventive software more than makes up for its expense by saving you from paying for fraudulent clicks. For instance, ClickGUARD rigorously analyzes consumer’s post-click behavior to determine and track fraudulent clicks quickly and accurately, and allows you to block IP addresses confidently, knowing you won’t be blocking real people. 

Third-party solutions tailor to your business and industry, which saves you money to spend on ads elsewhere.They also take the burden away from your mind so you can focus on what really matters, running your business. 

Which is precisely why we’re inviting you to check out ClickGUARD. Wink-wink 😜

Jason is a passionate data-driven specialist with extensive PPC & SEO experience. When not writing about SEM he can be found surfboarding the wildest ocean waves of the Argentinian coast.