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an individual or group of people tries to artificially generate traffic to a website. This results in an increase of ad-share revenue through ads places on their webpage. The more clicks, the higher the revenue share from the company who has chosen the website to display their ad. Essentially the company is paying for ad views which will never bring in customers to purchase a product or sale.

The second motivator is often done out of spite or done with the intention of receiving personal gain. When a large amount of artificial traffic is generated, companies still have to pay per each ad click which means their marketing money is being wasted on clicks which will never result in any revenue from sales; this impacts budgets.

When a company thinks an ad isn't lucrative enough to waste money on, it often results in a company dumping their ad and to focus on another avenue of marketing. Then the competitor sweeps in and gets the more prominent ad space which was abandoned because they original company thought it wasn't worth spending money on.

WHY CLICK FRAUD IS A PROBLEM

Advertisers are concerned with click fraud because the ad space they are paying for really isn't generating interest in people viewing their product, but simply gives the illusion the ads are being viewed. Since advertisers pay hosts per click received, they are essentially paying for displayed ads that aren't truly being utilized for the purpose ads serve.

Since click fraud causes payments for ads in which a sale will never materialize, companies end up spending significant amounts of money which results in huge losses for the business. These losses can negatively impact a budget or even drive a company out of business.

COSTS OF CLICK FRAUD

Click fraud is going to be one of the significant challenges businesses will face as more and more advertising is done over the web. Companies will have to learn how to effectively deal with this and know how to avoid large losses and the law will have to travel deeper into the murky waters to figure out what to do about it.

Governing of the Internet is tricky at best because laws will vary across the globe. Since much of the largely organized click fraud is originating in other nations outside of where a business resides thus the jurisdiction issue becomes another problem.

Click fraud not only harms a business but impacts everyone else too. As lawmakers try to pursue this issue and law enforcement performs investigations on click fraud, this will impact taxpayers of the nations who are investing resources in the click fraud problem. There is also a good chance businesses will increase the prices of their products in order to compensate for the lost revenues of click fraud and consumers will end up paying the price as well.

When click fraud is committed the perpetrators cause harm and while their intent may not be to intentionally hurt other innocent people, the collateral damage of click fraud has potential to stretch far.

Learn more about this author, Leigh Goessl.
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