NT1110 Lab 10: Click Fraud
Research Project, November 2012
ITT Technical Institute
Click fraud is a type of illegal fraud that occurs on the internet in pay per click, or PPC advertising, when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target of the ad's link.
PPC advertising is an arrangement in which webmasters (operators of Web sites), acting as publishers, display clickable links from advertisers in exchange for a charge per click. As this industry evolved, a number of advertising networks developed, acting as middlemen between these two groups (publishers and advertisers). Each time a (believed to be) valid Web user clicks on an ad, the advertiser pays the advertising network, who in turn pays the publisher a share of this ...view middle of the document...
However, huge numbers of clicks appearing to come from just one, or a small number of computers, or a single geographic area, look highly suspicious to the advertising network and advertisers. Clicks coming from a computer known to be that of a publisher also look suspicious to those watching for click fraud. A person attempting large-scale fraud, from one computer, stands a good chance of being caught. (Wikimedia, Inc., 2012)
Click fraud is the subject of some controversy and increasing litigation due to advertising networks being a key beneficiary of the fraud. Research has indicated that click fraud is perpetrated by individuals who use click fraud to increase their own personal banner ad revenues and also by companies who use click fraud as a way to deplete a competitor's advertising budget (ITBusinessEdge, 2012). Using a computer for this type of fraud is considered a Felony in California (Wikimedia, Inc., 2012).
The largest of the advertising networks, Google's AdWords/AdSense and Yahoo! Search Marketing, act in a dual role, since they are also publishers themselves (on their search engines). According to critics, this complex relationship may create a conflict of interest. This is because these companies lose money to undetected click fraud when paying out to the publisher but make more money when collecting fees from the advertiser. Because of the spread between what they collect and pay out, unfettered click fraud would create short-term profits for these companies. (Wikimedia, Inc., 2012)
Proving click fraud can be very difficult, since it is hard to know who is behind a computer and what their intentions are. Often the best an advertising network can do is to identify which clicks are most likely fraudulent and not charge the account of the advertiser. Even more sophisticated means of detection are used, but none are foolproof. (Wikimedia, Inc., 2012)
ITBusinessEdge. (2012). Webopedia.com. Retrieved from Webopedia Click Fraud: http://www.webopedia.com/TERM/C/click_fraud.html
Wikimedia, Inc. (2012, October). Click Fraud. Retrieved from Wikipedia.org: http://en.wikipedia.org/wiki/Click_fraud