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What is click fraud?

Click fraud is a serious problem. In fact, up to 40% of all clicks on ads are fraudulent.  And that number is rising!  How does this affect your business? Let’s look at an example.

You’re a small business owner and you work with a digital marketing agency to manage your Google Ads account.  In any given month, you might spend $1,000 on paid search advertising (we’ll use round numbers for simplicity). Your marketing agency reports that you received 3,500 clicks from those ads and 100 leads from those clicks (2.8% conversion rate).

How would a 40% increase in ROI affect your ads?

You’re happy with the results and consider it a successful campaign because you have more than enough leads to meet your sales goals.

Or are you?

After all, 40% of the 3,500 clicks may have been fraudulent. That means 1,400 of them never had any chance of converting into leads or sales. On top of that, if your ad budgets are set up correctly (and they should be) then almost none of those fraudulent clicks should have counted toward your budget anyway.  Right?

Wrong!  In reality, your campaign might have only cost a fraction of your actual ad spend and generated the same amount of leads, but since neither you nor the agency is aware of click fraud, you don’t know that.

How much is click fraud affecting your business?

It’s an important question, but one that can be difficult to answer. Click fraud is a persistent threat for businesses running paid advertising campaigns and it can have a serious impact on your budget if left unchecked.

But how much of your PPC budget is really being taken up by click fraud? You may be surprised to learn just how widespread click fraud is.

How common is click fraud?

Spark Factory’s data suggests that 40% of all clicks are fraudulent and that advertisers lose $4 for every $10 they pay in ad spend as a direct result of fraud. If you’re not already taking steps to protect your business from this kind of fraudulent activity, those figures should make you sit up and take notice.

Imagine getting a $14 value for $10 dollars.

Why does click fraud happen?

Depending on who you ask, there are different reasons why click fraud happens. Some believe that it’s largely accidental — people accidentally clicking on ads while browsing the internet, or clicking multiple times because they’re having trouble loading a page. Others believe that competitors are responsible for most instances of click fraud, trying to destroy their rivals’ online reputations by driving up their advertising costs.  And of course, there are bots set up to click on ads to exhaust your budget and drive up costs.

What is click fraud?

  • The concept of click fraud seems simple enough: someone clicks on an ad with the intent to cause harm. But there are actually two types of fraudulent clicks, according to the Federal Trade Commission (FTC):
  • Malicious Deception — which occurs when a competitor tries to drive up the advertiser’s cost per click (CPC).
  • Out of Area – which occurs when traffic comes in from areas that are outside of the predefined geographic boundaries of the campaign.
  • Untrustworthy – which means that the traffic is suspicious.  This could mean it is a bot, VPN traffic, suspicious behavior on site, etc.

How do we prevent click fraud?

Spark Factory’s proprietary fraud prevention software actively monitors campaign activity in real-time, and reports fraudulent activity to Google, which allows us to receive credits for the lost ad spend, which is then rolled over into the next monthly budget.  While we can’t prevent bad actors from acting, we can prevent them from hurting you.  That’s the Spark Factory difference.

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