Click Fraud

DEFINITION of 'Click Fraud'

Click fraud is the act of illegally clicking on pay-per-click ads to increase site revenue or to exhaust advertisers’ budgets. Click fraud is different from invalid clicks in that it is intentional, malicious and has no potential for the ad to result in a sale.

Click fraud is done for two reasons. The first reason is to reduce competition among advertisers. For example, Advertiser A can engage in click fraud to use up Advertiser B’s ad budget and space – leaving Advertiser A as the sole advertiser. The other reason would be for site owners to commit click fraud to increase their ad revenue.

BREAKING DOWN 'Click Fraud'

There are three main ways that companies commit click fraud. Some companies will hire low-cost employees to manually click ads all day. Others will write or use scripts which automatically click on ads. Both of these methods are easily traceable unless the user or script masks the computer’s true IP address. Another popular way is by using computer viruses to takeover many computers and to have those computers click ads.