Pay-per-click (PPC) advertising is widely regarded as one of the best investments a digital marketer can make. Google estimates an average $2 return for every $1 spent on Google Ads, while a recent study found that PPC website visitors are 50% more likely to make a purchase than organic visitors.
PPC advertising can improve a campaign’s reach, while providing valuable real-time data and analytics allowing spend monitoring, and immediate adjustments in response to the information garnered from advertising clicks.
However, click fraud – the fraudulent clicking of PPC advertisements to generate charges – is a growing problem for advertisers and marketing professionals. Click fraud can come from many different sources. Sometimes a rival company will hire a click farm, where people click on a competitor’s advertisements all day; in other instances, click fraud is generated automatically by malware such as botnets or ad injections to generate revenue.
Regardless of the method used, click fraud is serious business. In 2017, an estimated 25% of clicks were determined to be falsified, impacting conversion campaigns in several ways.
1. Fraudulent charges. The most immediate impact of click fraud is that of falsified charges to the advertiser. Fake charges drain the advertiser’s budget, with significant costs to the business. In fact, one estimates the cost of click fraud at $42 billion in 2019, a number that could grow over $100 billion by 2023.
2. Distorted data. Click fraud costs companies in more ways than their current budget, however; it also misrepresents marketing data, changing the information that marketers use for data-driven decision making. Clicks without conversions skew conversion data, which affects campaign metrics as well as current and future strategy.
3. Wasted future spend. Not only does click fraud lose companies money out of their current advertising budget, the fact that data is distorted causes waste in future spend as well, as marketers change campaign strategies in response to counterfeit data.
4. Daily limit reached. If an advertiser has placed a daily limit on clicks with a PPC ad, click fraud can cause that limit to be reached very quickly, leading to a competitor’s advertisement surfacing in place of the original ad. This could have long-term effects on a company’s customer base.
There are steps that can be taken to protect your company – and your budget – from click fraud. Because click fraud can take many forms, and is hidden inside of legitimate data, it can be difficult to detect. This is why many companies join forces with an ad fraud detection partner. A company that specializes in ad fraud detection can help to identify and eliminate fraud and separate valid from invalid leads, improving data accuracy and integrity, not to mention current and future marketing spend and strategy.