Click fraud – Simplified

Click fraud – Simplified

By: Mari Holman

Click fraud is a real threat to all online advertisers and publishers – no matter how big the company may be.

Within the past decade, several major internet companies have been sued with class-action lawsuits on click fraud. According to CBS, software advertiser Unified ECM, claimed that Facebook charged them for “non-existent, fraudulent or invalid clicks” in 2009. As recently as spring of 2014, Business Insider reports that Google was sued over allegations of click fraud.

The internet is a very scary place – filled with malicious cybercriminals and malware. Ignorance is no longer an option. One’s brand, public reputation and customers are at stake. Arming oneself with knowledge is the best way to prevent attacks or incidents that could lead to indictments of fraud.

What is click fraud?

To understand click fraud, one needs to first understand models that it infiltrates.

PPC Model

Digital publishers sell advertising space to advertisers. In pay-per-click models, they charge the advertiser an expense every time someone clicks on the ad. Advertising networks negotiate the relationships between publishers and advertisers. When a visitor clicks on an ad, typically both the advertising network and the publisher are paid a certain amount.

Click fraud occurs when the PPC model is exploited with falsified clicks, boosting advertising network and publisher revenues and short changing advertisers.

Fraud can also occur with the CPM model.  CPM, or cost-per-million models typically costs less than PPC, but can also be exploited for click-fraud.

CPM Model best online casino

With a publisher’s click-fraud in the CPM model, a page’s site visits, rankings and performance are superficially boosted by falsified clicks. This makes a publisher’s inventory artificially more expensive for advertisers. This can also drive up real-time bidding costs.

Which is safer, CPM or PPC?

Neither – both CPM and PPC are open to exploitation by malicious parties.

Click-fraud miscreants create malware-bots that hijack devices to click on a publishers’ ads – whether or not the user is even online. Oftentimes, the user is not even aware that their computer has this malware as it does not affect their user experience.

Who might perpetuate click fraud?

Here is a short list of parties who could have the motives to implement a click-fraud attack. It is by no means exhaustive, as the internet hosts a seemingly endless number of cybercriminals.

  1. Competitors

Businesses can drive up an advertisers costs by using third parties/malware to click on a competitors ads. Malicious competitors can also set up their activities to make it look as if the publisher themselves are driving up ad clicks by ‘framing them’ with a code hack.

  1. Political and special interest groups

It is not unheard of for political and interest groups to attempt to drive a company out of business by launching a digital attack with click fraud. Thousands of computers owned or hacked by the groups could use malware software that clicks on ads.

  1. Patrons

Sometimes publisher’s patrons naively believe they are helping by clicking on a sites ads. This often times backfires, as it draws allegations of suspicious activity.

  1. Publishers

Click-fraud drives up publishers’ revenues/the cost of their inventory, thus providing incentive.

How do I protect my company from click fraud?

Consider partnering with providers who protect their ad inventory with industry recognized malware-detection services, like Risk IQ and Integral Ad Science. These companies offer products that scan and track online advertising throughout the supply chain. As soon as a malware bot or malicious code encroaches an ad it can be identified, removed and traced back to its source.

IAB, the Interactive Advertising Bureau, offers a list of providers who have been audited and meet quality assurance guidelines. It is a great idea to check this list when in doubt about a publisher’s certifications and authenticity.

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