If somebody were to tell you that up to 20% of what you spend on pay-per-click (PPC) advertising may be wasted due to fraudulent activity such as click fraud, would you be worried?

You may be wise to be weary, as click fraud is endemic in the online advertising business, with some marketers claiming that up to 50% of their billed-for ads are generated by non-human traffic.

What is Click Fraud?

Frequently seen in the pay-per-click world, click fraud is the act of clicking on an advert with malicious intent, rather than from any real interest in the advertiser’s offerings. The practice is typically carried out by a competitor or faux middleman, in order to drive campaign costs up to the point that the advertiser has to curtail advertising spends. This paves the way for the competitor to increase their market presence, clicks and sales.

What can you do to stop it?

Click fraud is a criminal offense, but it can be difficult to prove because it can be tough to distinguish legitimate from fake clicks. While you can't completely eliminate the risk of click fraud, you can diminish the likelihood of it devastating your advertising budget.

Here are some techniques you can employ to reduce the risk of becoming a click fraud victim:

• Track your advertising campaigns, looking out for any unusual activity.  Google’s special analytics can display the number and percentage of clicks determined as “invalid.”

• Target your campaign as much as possible. For example, if you are trying to get new customers in Santa Monica, target either Santa Monica for an extremely targeted campaign or Los Angeles – do not target the entire USA.

• Create a unique URL for your PPC landing page and don’t link it to anything else, so you can cleanly evaluate click sources.

• Limit exposure by setting spending caps on your total campaign, or for hourly or daily budgets.

• When you look at the IP addresses that are clicking on your pay per click ads, they should all be different. If there are duplicate IP addresses, you are a victim of fraudulent activity.

• Use diverse or long-tail keywords, especially if your primary keywords are highly sought-after.  Less competitive keywords will be more cost-effective, too.

At ExactDrive, we can help you design an effective PPC campaign, monitor it and stay updated with detailed reporting. You’ll be better able to minimize your potential loss from click fraud, while getting the best results and return on your advertising investment.