The terms ‘click fraud’ and ‘ad fraud’ are often used interchangeably. But technically, they are not the same thing. Click fraud is just one part of a larger ad fraud scheme. So while all click fraud is ad fraud, not all ad fraud is click fraud.
If you are confused, try thinking in terms of dogs. All poodles are dogs but not all dogs are poodles. Using the analogy to explain ad fraud, it is the equivalent of all dogs while click fraud would be the equivalent of the poodles.
Click Fraud Works Well
The makers of the Fraud Blocker software say that, in the grand scheme of things, cyber criminals utilize click fraud because it works well. Click fraud is the practice of manually or automatically generating pay-per-click (PPC) ad clicks to drive revenues or harm competitors.
Fraudulent clicks can be perpetrated in lots of different ways:
- Click farms that employ hundreds of people to click on ads
- Click bots that automate the process of finding and clicking on ads
- Accidental clicks achieved through strategic ad placement
- Stealth clicks achieved through ad stacking and other practices
- Intentional clicks designed to harm competitors
- Intentional clicks perpetrated by disgruntled customers.
Click fraud works because it costs advertisers money without providing any sort of financial return. Every fraudulent click represents money flushed down the drain. A well-designed click fraud scheme can do considerable harm to a company’s marketing budget.
Click Fraud Can Be Detected
As effective as click fraud is, it has its weaknesses. Its biggest is the ease with which it can be detected. If you know what to look for and you have the right tools, uncovering it is not difficult.
Imagine a single click bot running in a nondescript Eastern European town. An advertiser paying attention to ad data should be able to see the IP addresses from which traffic is coming. A large amount of traffic from the same IP address in a short amount of time indicates click fraud.
Likewise, click fraud perpetrated by click farms leaves data behind. Analyzing that data easily reveals too many clicks from the same general area in too short a time. That is the very reason most click farms are in countries with very little regulatory oversight.
Criminals Rely on Multiple Strategies
Smart criminals do not put all their eggs in the click fraud basket. Not only is doing so risky, it also won’t produce a ton of revenue. To make the most of ad fraud, criminals rely on multiple strategies working simultaneously.
While a criminal has a click farm running 24/7, they might also be engaged in:
- ad injection
- cookie stuffing
- domain spoofing
- conversion fraud
- affiliate marketing fraud
- search marketing fraud.
Without getting into all the details, each one of these fraudulent strategies falls under the ad fraud banner because they all take advantage of the systemic weaknesses of PPC, Banner, and mobile ads.
Cheating by Faking Impressions
Ad fraud’s primary mechanism is faking impressions. That’s how fraudsters cheat. They combine technology with weaknesses in the system to generate what appear to be large volumes of impressions. What constitutes an impression depends on the platform and type of ad you are talking about.
Fraudsters do what they do to the tune of billions of dollars annually. Click fraud works well enough that it is a staple of the broader ad fraud practice. But it is just one tool in a much larger box. At the end of the day, criminals use a variety of ad fraud strategies to make money.