As Pay-Per-Click (PPC) advertising becomes increasingly popular among businesses of all sizes, so too does the risk of click fraud. Unfortunately, many marketers are not aware of these risks, leaving them vulnerable to wasted advertising budgets and lost revenue. In fact, digital fraudsters using fake views, clicks, and likes as money-making schemes is so pervasive that the costs related to digital advertising fraud worldwide are expected to grow exponentially to $100 billion in 2023.
As a marketer, it’s crucial to stay informed about the various types of PPC fraud that exist and take proactive measures to protect your advertising campaigns. In this article, we’ll explore some of the lesser-known types of PPC fraud that marketers may not be aware of and provide practical tips on how to detect and prevent them.
What is PPC fraud?
PPC (Pay-Per-Click) fraud is a serious concern for businesses that rely on digital advertising to drive traffic and sales. It’s a broad term that encompasses various fraudulent activities aimed at cheating businesses out of their PPC advertising budget.
Click fraud is the most prevalent type of PPC fraud, which involves generating invalid clicks on PPC ads through bots, automated software, or human intervention with the intention of damaging competitor ad budgets or increasing publisher profits.
PPC fraud can also involve fake clicks from publishers who earn revenue for each click on their ads. In such cases, publishers can manipulate click data or engage in other shady practices to inflate click counts and generate more revenue from advertisers. In other instances, competitors may engage in click fraud to harm rival businesses by running up their advertising costs.
One of the main reasons click fraud is such a growing concern for businesses is that it can be carried out on a large scale through click farms. These click farms often employ vulnerable and low-paid workers in developing countries who are paid to repeatedly click on ads or social media posts – with the aim of either boosting the publisher’s profits or harming competitor ad budgets.
What are the effects of click fraud on businesses?
It’s important for businesses to understand the potential consequences of click fraud to take necessary measures to prevent it. Here are some of the main ways click fraud can harm your business:
- Click fraud distorts ad campaign metrics
When fraudulent clicks are mixed in with legitimate clicks, it becomes challenging to determine the actual effectiveness of campaigns. As a result, businesses may be misled into thinking that their campaigns are performing well, when in reality, they are wasting valuable advertising dollars.
- Click fraud leads to low return on advertising spend (ROAS)
Since fraudulent clicks do not result in conversions or sales, the cost per conversion can increase dramatically. This can lead to a situation where businesses are spending more money on advertising than they are generating in revenue, resulting in a negative return on investment (ROI).
- Click fraud wastes internal time and effort of teams
When teams are focused on investigating and resolving click fraud issues, they may be neglecting other essential aspects of their job, such as optimizing campaigns or developing new marketing strategies. By causing teams to chase non-revenue generating activities, click fraud ultimately has a significant impact on a company’s productivity and profitability.
Top Types of PPC Fraud
Being aware of these fraudulent practices is essential for any business that wants to protect their ad budget and ensure that their advertising efforts are effective. In this section, we will delve into the most common types of PPC fraud, how they work, and the potential impact they can have on businesses.
Click spam is a deceptive technique used by fraudsters to falsely accumulate clicks on mobile ads. Unlike other types of click fraud, click spamming can be challenging to detect as it attributes fake clicks to real users. Essentially, when a user unknowingly opens a web page or app operated by a fraudster, hitbots or clickbots start automatically clicking on ads that the user may not even see.
By simulating genuine user clicks, click spamming enables digital fraudsters to accumulate fake engagement on ads and receive a payout. Moreover, click spamming can be used to sabotage competitors by inflating engagement on their ads and distorting ad campaign metrics. This makes it challenging for advertisers to measure the effectiveness of their campaigns and optimize their Return On Advertising Spend (ROAS).
A notable example of click spamming is the DrainerBot operation. DrainerBot was a massive mobile ad fraud operation that affected millions of Android users, causing harm to both advertisers and consumers. The bot used infected code to download invisible video ads on Android devices and clicked on ads without user consent, draining battery life and consuming excessive amounts of data. Oracle reported that the infected apps resulted in smartphone owners incurring hundreds of dollars in overage charges.
How to avoid click spam: businesses can take certain precautions such as using ad fraud detection software and monitoring their ad campaigns regularly. It’s also important to work with trusted partners, including ad networks and publishers, who have measures in place to prevent click fraud. Additionally, businesses can implement ad verification tools that allow them to check the validity of clicks and impressions.
Ad injection fraud usually involves the use of adware, which is software that injects ads onto webpages without the owner’s knowledge or permission. This adware can be intentionally downloaded, or it can come bundled with other software or applications that users unknowingly install on their computers or mobile devices.
Once the adware is installed, it starts to inject ads onto webpages, disrupting the user’s browsing experience and replacing legitimate ads with fake ones. Ad injection fraudsters often use deceptive techniques such as overlaying ads on top of existing ones, or making ads appear as if they are part of the website’s content.
For advertisers, ad injection can be particularly harmful as their ads may be placed on low-quality websites or even sites that are completely unrelated to their business. This can not only lead to a decrease in ad performance, lower click-through rates, and wasted ad spend – it can also cause significant distrust among potential customers and damage to an advertisers reputation.
How to avoid ad injection: It’s important to be cautious when downloading and installing software, especially from third-party sources. Stick to trusted sources like the official app store for your device or the official website of the software provider. It’s also a good idea to keep your anti-virus and anti-malware software up to date and perform regular scans to detect and remove any ad injection software that may have slipped through. Additionally, you can install ad blockers or browser extensions that specifically target and block ad injection.
Email phishing attacks are nothing new – but you may not be aware of this PPC-specific technique being used.
Search Engine Watch reported on a phishing scam hijacking URLs of well known financial and banking companies. The scam uses these companies’ paid search campaigns to send users to a malware phishing site. Users are likely to click on the ads because they trust the brand, and fraudsters piggyback off that credibility to surreptitiously send the user to a fake website that lures personal information (like login details) out of them.
This type of fraud is particularly insidious because users are more likely to click on the ads as they trust the brand. By leveraging the credibility of these trusted brands, fraudsters can surreptitiously send users to a fake website designed to extract personal information, such as login details.
These phishing scams can have devastating effects on customers who fall prey to them: personal and financial information can be compromised, leading to identity theft, fraudulent purchases, and other malicious activities. Additionally, these scams can be a significant threat to the reputation of well-known brands, as customers may lose trust in them if they feel that their security has been compromised.
How to avoid PPC phishing: Businesses need to be vigilant about the types of ads that appear under their brand name. It’s essential to monitor ad campaigns and regularly review ad performance data to identify suspicious activity. It’s also crucial to educate users about the dangers of phishing scams and provide guidance on how to identify and avoid them. By taking these precautions, businesses can help protect themselves and their customers from the damaging effects of PPC phishing.
Viewbotting is a fraudulent way of gaining exposure and viewers in the live streaming community by using bots. This method uses illegitimate scripts to manipulate the view count and push a stream to the top of the popularity rankings to attract more viewers, subscribers, and revenue. And to make the fake views seem more real, viewbotting sometimes uses chatbots to mimic viewer interaction. However, viewbotting is not only harmful to other streamers – it also affects digital advertisers.
Since the Twitch Partner Program enables streamers to earn revenue from ads displayed on their channel, viewbotting is essentially a form of stealing ad spend from digital advertisers. Streamers who use viewbotting services can play ads on their channel while they live stream and make a commission off the revenue that advertisers pay to Twitch. However, if the streamer is using viewbotting services, those ads aren’t being seen by real people, and advertisers are essentially wasting their money on bot views.
How to avoid viewbotting: Twitch has developed detection systems and uses a combination of machine learning and human review to investigate and take action against fraudulent accounts. Streamers should also prioritize organic growth and engagement to ensure the integrity of the live streaming community and protect the interests of advertisers.
Fake streaming, also known as stream fraud, is a type of digital fraud that primarily affects music streaming platforms like Spotify. The fraudsters use bots to artificially inflate the number of play counts on a song, giving the impression that it’s more popular than it actually is. By doing this, they earn fraudulent royalties that should have gone to genuine artists who use the platform honestly.
Fake Spotify streaming also affects advertisers who are paying for ad time, thinking that their ads are being heard by real people, but in reality, the bots are listening to them. This means that advertisers are essentially wasting their money on fake plays. Moreover, brands that partner with artists based on their supposed popularity and reach are also victims of this type of fraud.
How to avoid Fake Streaming: Although Spotify is taking measures to combat stream fraud, it remains a significant problem since fraudsters are constantly finding new ways to bypass the platform’s anti-fraud measures. This underscores the importance of advertisers, artists, and streaming platforms staying vigilant to protect against this type of digital fraud.
How about a Few Success Stories?
It’s not all doom and deception out there. The good news is that companies are striking back against digital fraudsters – and winning.
In 2016 Twitch filed a lawsuit against several “botmakers” offering viewbotting services to Twitch users. The defendants, a team of seven, were ordered to pay nearly $1.4 million to Twitch in damages for trademark infringement, breach of contract, unfair competition and violation of the Anti-Cybersquatting Consumer Protection Act. This was a major win in the fight against viewbotting.
Another remarkable success story comes from the takedown of individuals involved in the infamous Methbot/3ve ad fraud operation. Methbot was an international cybercriminal ring traced to Russia and operating out of data centers in the U.S. and Netherlands making between $3 million and $5 million per day using bots to target the video advertising industry and fraudulently rake in ad revenue.
An investigation by the FBI, with help from other companies, led to the arrest of several ringleaders including Aleksandr Zhukov.
Zhukov was apprehended in Bulgaria, and several other cybercriminals involved in the ad-fraud ring were arrested in Malaysia and Estonia. According to the U.S. Department of Justice, the charges against them include wire fraud, computer intrusion, aggravated identity theft and money laundering. But what these takedowns really demonstrated was that law enforcement and companies can work together to bring down digital fraudsters – and make the online world a more trustworthy place for everyone.
So what can you do?
As an online marketer or entrepreneur, it is crucial to be aware of the various types of PPC fraud and know how to protect your business from it. One of the surest ways to protect yourself is by using click fraud detection and prevention software designed specifically to combat PPC fraud.
ClickGUARD offers a powerful solution for safeguarding your PPC campaigns against click fraud: by acting as a firewall that shields your Google and Meta Ads, it identifies and neutralizes the impact of fraudulent activity and enables you to truly maximize the effectiveness of your advertising budget.
Our latest version comes equipped with fully automated features, improved reporting, and a more intuitive user experience, making it accessible to any business or marketer looking to keep their search ad campaigns protected.
With a free trial available for everyone, there’s no reason not to try ClickGUARD and see the results for yourself.
What is PPC fraud?
PPC fraud refers to a range of fraudulent activities aimed at cheating businesses out of their pay-per-click advertising budget. It includes various activities such as generating invalid clicks on ads, manipulating click data, and using bots or automated software to inflate ad metrics.
How does click fraud affect businesses?
Click fraud can harm businesses in multiple ways, including distorting ad campaign metrics, leading to a low return on advertising spend (ROAS), wasting internal time and effort of teams, and increasing advertising costs.
What are the different types of PPC fraud?
There are many types of PPC fraud out there – and they are constantly evolving. Some of them include click spam, ad injection, viewbotting, PPC phishing, and fake streaming.
What are click farms?
Click farms are fraudulent businesses that usually employ low-paid workers to repeatedly click on ads or social media posts with the aim of either boosting the publisher’s profits or harming competitor ad budgets.
How can businesses protect themselves from PPC fraud?
ClickGUARD is the leading click fraud protection and prevention software. By acting as a firewall that shields your Google and Meta Ads, it identifies and neutralizes the impact of fraudulent activity and enables you to truly maximize the effectiveness of your advertising budget.