One of biggest threats to continued growth of Search Advertising is increasing plague of click fraud. Although there are varying forms of click fraud, most people define it as any click generated, and paid for, where intent is to drain advertiser’s budget. Advertisers know some clicks are more qualified than others, and not every visitor from their PPC campaigns will convert to a customer. But, they have a right to expect that traffic they are paying for is coming from people at least marginally interested in their products or services.

What Motivates Click Fraud?

Why does click fraud exist? What motivates people to deceive system by sending PPC advertisers bogus traffic? The short answer (as usual) is money.

Many Pay Per Click Advertising networks are partially, (or in some cases totally), dependent on affiliate sites to generate traffic for their advertisers. These networks syndicate their customer’s ads so they will appear on sites of their affiliates. Every time someone clicks on an ad PPC Network and affiliate site share revenue. The more clicks affiliate site generates, more money it makes. While vast majority of affiliates are legitimate trustworthy sites, others are in business of exploiting loopholes in system to line their pockets with real money by generating fake clicks. Often times weapon of choice used by these rogue sites to cheat system is a software script that automatically clicks on PPC ads.

Another variation of click fraud uses a more personal touch to steal advertiser’s money. In hyper-competitive world of Pay Per Click Advertising battle for premium positioning at an affordable cost can cause companies to use less than ethical techniques to gain an edge. Companies can drive up their competitor’s marketing costs by clicking on their Pay Per Click ads. If their competitor’s marketing costs get too high they may lower bids on their keywords, or stop bidding on word altogether. Either way, cost for word goes down, giving fraudulent company an opportunity to increase their ranking on page at a lower cost.

The Search Engine’s Response To Click Fraud.

An often misunderstood reality of Pay-Per-Click advertising is that many times you can't determine where you ad will be displayed once you sign-up with one of PPC Search Engines. In incestuous world of online advertising, companies are often simultaneously competitors and partners. This is never more true than in case of Search Engine Advertising.

Even The Big Guys Do It:

If Pay-Per-Click program you're using is from one of major brands that has it's own consumer search destination site (Google, Yahoo, Lycos etc,) it's a little easier to tell where your ads will show up. However, even if you're working with major players, your ads won't be limited to Search Engine you signed up with. For example, Google has agreements with Lycos, Ask Jeeves, AOL, and other lesser known brands, to display ads from Google AdWords program. Yahoo has relationships with MSN, and CNN.Com to display ads from its Overture Pay Per Click Program. Lycos owns HotBot.Com and has partnered with affiliates outside its network to increase distribution of ads from Lycos AdBuyer Pay Per Click program.

Distribution Strategies Of Smaller Search Engines:

Once you go beyond major Pay Per Click Advertising programs it becomes increasingly difficult to know where your ads will appear. Most of second tier Search Engines rely exclusively on networks of unknown sites for their distribution. FindWhat.Com, Kanoodle, Enhance and Search 123 don't operate sites that consumers use to search web. Because of this they have developed relationships with thousands of smaller sites to display ads from customers who sign up for their Pay Per Click programs.

Affiliate Traffic Isn't Necessarily Bad: