by Leigh Goessl

Created on: November 08, 2008

Internet users commit click fraud when they click on ads to intentionally generate payment from a business for a viewed ad. Click fraud can be accomplished by humans physically clicking on ads or by using computer programs to generate false traffic.

Engaging in click fraud is a crime and considered unethical because of this artificial traffic sent to the website hosting the ads. It has also become a significant problem for businesses that spend large amounts of their budgeted money on web advertising.

HOW CLICK FRAUD IS DONE

One way click fraud is done is from individuals or groups looking to inflate ad share revenues on a webpage for personal gain or to drive up competitor prices by using human or robotic clicks.

There is also wide scale artificial click fraud occurring. This kind is dangerous and costly for companies because it is very organized and a big operation. What it entails groups being hired overseas to click on ads to generate tons of artificial web traffic.

While all click fraud costs businesses significant amounts of money, these structured mass clicks costs a business a pretty penny. Some companies have reported hundreds of thousands in excess ad spending due to fraudulent clicks.

HOW CLICK FRAUD AFFECTS BUSINESS

Companies who buy ad space on websites do this with the hope of attracting customers and increasing their consumer base. Web advertising is an innovative and excellent way to try and reach a large number of consumers.

In order to determine whether or not a certain ad or webpage is worth the investment companies primarily rely on conversion ratios. This means they look at the number of times an ad has been clicked verses the amount of sales made from those clicks; from this number they can decide whether or not an ad is cost-effective.

If an ad has received hundreds of clicks, but only made three sales, they may decide the ad is not worth the money spent and drop the ad. Click fraud gives the impression of a poorly constructed or placed ad and a business may drop this ad because the payoff isn't high enough.

MOTIVATORS FOR CLICK FRAUD

The Internet is a fantastic way to try and reach consumers, but click fraud continues to be a consistent problem and one of the major drawbacks of web advertising. There are two primary motivators of why some engage in click fraud:

*To artificially generate ad revenue through falsified clicks

*To perform fraudulent clicking in order to force competitors to have more money spent on marketing

The first motivator is when

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