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Types of PPC Fraud and How Much Do They Cost Your Business?

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PPC fraud is real and it’s costing businesses up to 20% of their marketing budget. Anyone running a PPC campaign should be worried. You could be spending so many dollars on being defrauded.

This fraud practice is nothing new. It has been around since the early days of PPC advertising. The techniques of fraud have become sophisticated over the years though. To find out more about this practice and how much it’s costing your business, tag along with PPC Services.

PPC Fraud Explained

Let’s start by understanding what this fraud means. Click bot attacks, invalid clicks, and fraudulent clicks – they are all the same thing. Scammers have added more practices to the list such as click injection, and click spamming, and click spoofing. Let’s look into these fraud practices further:

Invalid Click 

It is a click on a paid link which isn’t genuine. Such clicks can be accidental and made by genuine users. However, they may also be applied to fraudulent practices.

PPC Fraud 

All fraudulent practices on PPC advertising fall under this category. 

Click Fraud

Any click on paid links that are malicious or not genuine. Let’s say you are aiming to rank your website on the keyword “Marketing Recruitment Agency” aiming to reach the first page of Google. Through click fraud, your competitor may click on your paid links to deplete your budget. The aim is eventually to remove you from paid results.

Ad Fraud

Paid ads (which may be in video or banner format) are hosted on a site designed for capitalizing on ad payout. Sound’s complicated? Let me explain it further.

A fraudulent marketer in case of ad fraud designs a website for hosting ads. It channels fake traffic through those ads to collect payouts on impressions and clicks. The marketer keeps on paying for clicks while the leads generated as a result are zero.

Click Spoofing 

These three terms are the latest addition to PPC fraud. They apply to mobile traffic. An app is used for generating fake clicks to collect payment for clicks and installs.

In this type of fraud, the marketer may get genuine customers but through a huge amount of clicks. As a result, the fraudster will take home payouts from even the organic installs. 

Can It Happen to My Business?

Of course, it can! It can affect any type of PPC campaign. The most common target include industries such as plumbing, locksmith, remedial work, tourism, health services, orthodontists, etc.

Most of these are high demand businesses. When a user desperately needs a plumber, he won’t spend a lot of time researching, right? The conversion on such clicks is high probably between $40 and $50. This would attract any scammer. 

How Much Does a Click Fraud Cost?

Moving on to the real deal. How much does a click fraud cost a business? This depends on the industry and your ad spend. On average, 4 to 20% of the PPC ads of most marketers are subjected to fraud. 

Companies usually spend between $1000 and $50,000 per month on PPC ads. Some may even spend more and it’s hard to define a figure. Online gambling sites are a common victim of PPC fraud. It’s probably because they spend hundreds of thousands monthly on PPC. 

Any business spending $20,000 on PPC per month can expect $3000 or 15% of it going to scammers. Both Google and Bing ads are subject to click fraud. Unfortunately, not much has been done to prevent these frauds. The statistics for ad frauds have been consistent over the years. The law doesn’t offer much protection either.

Is It Illegal?

The word fraud may be attached to it, but PPC fraud is not illegal; not yet. Defrauding advertisers might be illegal in some countries, but there are no policies or laws to offer protection. 

You may report the fraud to cybercrimes authorities. They may or may not be able to help. You are probably on your own to identify the fraud and then come up with a solution to fix it.

How to Stop PPC Fraud?

Concerned about the fraud? Thinking is there something online business owners can do to prevent click fraud? Yes, there but it requires a lot of work. Here’s what you can do:

Use an Anti-Click Fraud Software 

You are going to have to do some research to find an industry-leading option. I use ClickCease. It assigns each device a unique ad. This helps me identify the pattern of fraudulent activity whenever someone clicks on my ads. Even if the IP address of the user changes, it can tell if it’s a repeated visitor since they are using the same device.

The software has its own blacklist of suspicious sources. It blocks them up if the visitor seems shady. This tool has saved me a lot of time. It has an easy-to-use dashboard that lets you view the location, time, and other information of the fraudulent sources. It is perfect for those who run multiple campaigns.

Keep an Eye Manually 

There are some things you can do manually to keep an eye on the fraudulent activities. Here is what you can do:

  • Check the Time

Some of the marketers run their ads 24 hours 7 days a week. What is the most effective time to run ads? Figure that out and you should be able to reduce your exposure to fraud.

  • Location

Some fraudsters target specific areas. If you think there are certain locations where chances of fraud are higher, skip those from your campaigns in the first place.

  • Negative Keywords 

Scammers use board search terms. They don’t spend much time doing keyword research. Use this to your advance. Get specific with keywords. Don’t be afraid to make the most of negative keywords.

  • Keep on Monitoring 

It’s important to monitor your ads for suspicious activities daily. If there is a sudden spike in activity, and there are no corresponding conversions, this is an indication of fraud.

Conclusion 

If you think you are being a victim of fraud, come up with an action plan right away. Currently, I am running a campaign on the keyword “telecommunications staffing.” I am constantly monitoring the clicks from my ad dashboard. Besides this, I am using ClickCease to detect fraud and protect my marketing budget.  So far, I am in safe hands.

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