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Click fraud occurs in pay per click online advertising when a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating an improper charge per click. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud whether they like it or not.

Use of a computer to commit this type of fraud is a felony in many jurisdictions, for example as covered by Penal code 502 in California and the Computer Misuse Act 1990 in the United Kingdom. There have been arrests relating to click fraud with regard to malicious clicking in order to deplete a competitor's advertising budget.

In 2004, a California man created a software program that he claimed could let spammers defraud Google out of millions of dollars in fraudulent clicks. Authorities said he was arrested while trying to blackmail Google for $150,000 to hand over the program.*

Pay per click advertising

Pay per click advertising or PPC advertising is an arrangement in which webmasters (operators of web sites), acting as publishers, display clickable links from advertisers, in exchange for a charge per click. As this industry evolved, a number of advertising networks developed which acted as middlemen between these two groups (publishers and advertisers). Each time a (believed to be) valid web user clicks on an ad, the advertiser pays the advertising network, who in turn pays the publisher a share of this money. This revenue sharing system is seen as an incentive for click fraud.

The largest of the advertising networks, Google's AdWords/AdSense and Yahoo! Search Marketing, act in a dual role, since they are also publishers themselves (on their search engines). According to critics, this complex relationship may create a conflict of interest. For instance, Google loses money to undetected click fraud when it pays out to the publisher, but it makes money when it collects it from the advertiser. Because of the spread between what Google collects and what Google pays out, click fraud directly and invisibly profits Google.

Non-contracting parties

A secondary source of click fraud is non-contracting parties, who are not part of any pay-per-click agreement. This type of fraud is even harder to police because perpetrators generally cannot be sued for breach of contract or charged criminally with fraud. Examples of non-contracting parties are:
  • Competitors of advertisers: These parties may wish to harm a competitor who advertises in the same market by clicking on their ads. The perpetrators don't profit directly, but force advertiser to pay for irrelevant clicks thus weakening or eliminating a source of competition.
  • Competitors of publishers: These persons may wish to frame a publisher. It is made to look like the publisher is clicking on its own ads. The advertising network may then terminate the relationship. Many publishers rely exclusively on revenue from advertising and can be put out of business by such an attack.
  • Other malicious intent: As with vandalism, there's an array of motives for wishing to cause harm to either an advertiser or a publisher, even by people who have nothing to gain financially. Motives include political and personal vendettas. These cases are often the hardest to deal with, since it is hard to track down the culprit, and if found, there is little legal action that can be taken against them.
  • Unwanted "friends" of the publisher: Sometimes upon learning a publisher profits from ads being clicked, a supporter of the publisher (like a fan, family member, or personal friend), will click on the ads to "help". However, this can backfire when the publisher (not the "friend") is accused of click fraud.

Advertising networks try to stop fraud by all parties, but often do not know which clicks are legitimate. Unlike fraud committed by the publisher, it is hard to know who should pay when past click fraud is found. Publishers resent having to pay refunds for something that is not their fault. However, advertisers are adamant that they should not have to pay for phony clicks.

Organization

Click fraud can be as simple as one person starting a small web site, becoming a publisher of ads, and clicking on those ads to generate revenue. Oftentimes the number of clicks, and their value, is so small, that the fraud goes undetected. Frequently publishers will claim small amounts of such clicking is an accident, which is often the case.

Much larger scale fraud also occurs. Those engaged in large scale fraud will often run scripts which simulate a human clicking on ads in web pages. However, huge numbers of clicks appearing to come from just one, or a small number, of computers, or single geographic area, look highly suspicious to the advertising network and advertisers. Clicks coming from a computer known to be that of a publisher also look suspicious to those watching for click fraud. A person attempting large scale fraud, alone in their home, stands a good chance of being caught.

Organized crime can handle this by having many computers with their own internet connections in different geographic locations. Often scripts fail to mimic true human behavior, so organized crime networks use Trojan code to turn the average person's machines into zombie computers and using sporadic redirects or DNS-cache-poisoning to turn the oblivious user's actions into actions generating revenue for the scammer.

Impression fraud is an insidious variant of click fraud in which the advertiser is penalized for having an unacceptably low click-through rate for a given keyword. This involves making numerous searches for a keyword but without clicking of the ad. Such keywords are disabled automatically, enabling a competitor's lower-bid ad for the same keyword to continue while several high bidders (on the first page of the search results) have been eliminated.

It is very difficult for advertisers, advertising networks, and authorities to pursue cases against networks of people spread around multiple countries.

Litigation

Disputes over the issue have resulted in a number of lawsuits. In one case, Google (acting as both an advertiser and advertising network) won a lawsuit against a Texas company called Auction Experts (acting as a publisher), which Google accused of paying people to click on ads that appeared on Auction Experts' site, costing advertisers $50,000*. Despite networks' efforts to stop it, publishers are suspicious of the motives of the advertising networks because the advertising network receives money for each click, even if it is fraudulent.

In July of 2005, Yahoo, the company that invented the PPC advertising model, settled a class action lawsuit against it by plaintiffs alleging it did not do enough to prevent click fraud. Yahoo paid $4.5 million in legal bills for the plaintiffs, and agreed to settle advertiser claims dating back to 2004 *.

Solutions

Proving click fraud can be very difficult, since it is hard to know who is behind a computer and what their intentions are. Often the best an advertising network can do is to identify which clicks are most likely fraudulent and not charge the account of the advertiser. Ever more sophisticated means of detection are used, but none is foolproof.

The pay-per-click industry is lobbying for tighter laws on the issue. Many hope to have laws that will cover those not bound by contracts.

A number of companies are developing viable solutions for click fraud identification and are developing intermediary relationships with advertising networks. Such solutions fall into two categories:

a) Forensic analysis of advertisers' web server log files

This analysis of the advertiser's web server data requires an in-depth look at the source and behavior of the traffic. As industry standard log files are used for the analysis, the data is verifiable by advertising networks.

b) Third-party corroboration

Third parties offer web-based solutions that might involve placement of single-pixel images or Javascript on the advertiser's web pages and suitable tagging of the ads. The visitor may be presented with a cookie. Visitor information is then collected in a third-party data store and made available for download. The better offerings make it easy to highlight suspicious clicks and they show the reasons for such a conclusion. Since an advertiser's log files can be tampered with, their accompaniment with corroborating data from a third party forms a more convincing body of evidence to present to the advertising network.

Google AdSense Anti Click Fraud Software

There are numerous companies and software products designed to assist advertisers reduce click fraud. One non-commercial product is AdLogger (Google AdSense only)

The open source AdLogger software allows specific IP addresses to be blocked from viewing certain ads, and also allows for the automatic banning of repeat clickers. These methods help a site owner to monitor where their Google AdSense click throughs are coming from on the internet and therefore able to spot patterns that could indicate click-fraud. Once a source of clicks has been identified as potentially fraudulent the software can be used to block the location of those click from continuing.

External links

Internet advertising and promotion | Internet fraud | Electronic commerce | Fraud

Klickbetrug

 

This article is licensed under the GNU Free Documentation License. It uses material from the "Click fraud".

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