How would you feel if up to 20% of your price-per-click (PPC) budget was being regularly wasted as a result of fraudulent activity? Most marketers today know that Pay-per-click advertising is a useful, and effective marketing tool that can drive traffic towards your website, improving search visibility and enhancing customer conversion. In fact, almost all websites and businesses online today that engaged in serious online marketing schemes will take advantage of PPC programs like Google AdWords at some point.

Unfortunately, although a targeted PPC campaign can be an ideal way of boosting your online traffic, it is not immune to the unscrupulous marketers out there that abuse the PPC model to sabotage competitors. Click-fraud is a serious issue to anyone unlucky enough to encounter it, and unnoticed click fraud can drain money from your marketing budget, while providing the false impression that your schemes are successful - thereby creating an even bigger problem.

What is Click Fraud?

So what is click fraud? In simple terms, it is a method that competitors use when they're frustrated with seeing other company ads appear above their own or they want to generate revenue in a fraudulent fashion. By employing bots or people to commit click fraud, these competitors aim to spend up your daily budget before you've even had the chance to reach your real potential clients. Click fraud can also allow advert display networks to generate large amounts of false commission. In a fair world, ad networks would be paid according to only the natural clicks they generate, but by utilizing bots in collecting data about adverts, then using other bots to click these adverts, huge amounts of fraudulent revenue can be generated.

Either way, the company paying for advertising efforts is left seeing a huge number of clicks without the results they should expect from actual conversions. Unfortunately, completely eradicating the risk of click-fraud today is unlikely, but that doesn't mean you can't take steps to minimize the damage and make more out of your PPC budget. Here are some useful tips that should help you combat click fraud.

1. Select Targeted PPC keywords

The first, and often most useful, way of dealing with click-fraud is to minimize the amount of potential damage false clicks will have on your campaign. If you want to yield the highest possible ROI, then you should only bid on the most industry-specific and targeted keywords, as these high-value words will generate more traffic and ensure that the majority of the clicks you receive will be from customers - not bots. Tools like AdWords Keyword Planner can be particularly useful when researching PPC keywords.

2. Monitor Your User Behavior

Remember, minimizing click fraud starts with being able to identify it. If you want to weed out false clicks and maximize your ad value, you (or your hired advertising vendor or agency) should make a habit of checking your PPC program each and every day. This should be something that you do anyway if you want to see which keywords and ads are yielding the most positive results, but don't forget to check for click fraud at the same time.

If you use Google AdWords, then you can start by looking at Dimensions, as well as frequency and reach. Measuring reach and frequency should give you a good idea as to whether the majority of your clicks are coming from a single IP address or browser - which can be a sign of click fraud. Try to cross-check the repeat click-through against the bounce rate for the day - this should help you to determine whether you have become a click fraud victim.

3. Establish Your Budget

Once you have built an appropriate range of long-tail keywords for your campaign, you're going to need to establish a bidding strategy that fits your budget. If you're new to the concept of PPC - it involves paying a certain amount for each time someone clicks one of your ads, and this amount generally depends upon the desirability of your chosen keyword.

In order to reduce your chances of falling victim to click fraud, it's a good idea to set a maximum cost-per-click bid so that you can ensure you won't accidentally end up spending more than you intended. You should also consider setting up a maximum daily PPC budget so that you are never charged more than a certain amount each day. This should help to reduce the damage of fraudulent clicks, and help you to analyze your AdWords campaign more appropriately. For example, a large influx of clicks in a particularly short time period could be a sign of click fraud, and by setting a daily budget, you may be more capable of containing the damage.

Note: This article was originally published on ClickZ.com on July 14th, 2015.