Click fraud is a type of fraud that occurs on the Internet in pay-per-click (PPC) online advertising. In this type of advertising, the owners of websites that post the ads are paid an amount of money determined by how many visitors to the sites click on the ads. Fraud occurs when a person, automated script or computer program imitates a legitimate user of a web browser, clicking on such an ad without having actual interest in the target of the ad's link. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud.
Media entrepreneur and journalist John Battelle describes click fraud as the "decidedly black-hat" practice of publishers illegitimately gaming paid search advertising by employing robots or low-wage workers to repeatedly click on each AdSense ad on their sites, thereby generating money to be paid by the advertiser to the publisher and to Google.
PPC advertising is an arrangement in which webmasters (operators of websites), 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, which acted 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, which in turn pays the publisher a share of this money. This revenue-sharing system is seen as an incentive for click fraud.
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.
A secondary source of click fraud is non-contracting parties, who are not part of any pay-per-click agreement. This type of fraud is even harder to police, because perpetrators generally cannot be sued for breach of contract or charged criminally with fraud. Examples of non-contracting parties are:
Advertising networks may try to stop fraud by all parties but often do not know which clicks are legitimate. Unlike fraud committed by the publisher, it is difficult to know who should pay when past click fraud is found. Publishers resent having to pay refunds for something that is not their fault. However, advertisers are adamant that they should not have to pay for phony clicks.
Click fraud can be as simple as one person starting a small Web site, becoming a publisher of ads, and clicking on those ads to generate revenue. Often the number of clicks and their value is so small that the fraud goes undetected. Publishers may claim that small amounts of such clicking is an accident, which is often the case.
Much larger-scale fraud also occurs. Those engaged in large-scale fraud will often run scripts which simulate a human clicking on ads in Web pages. 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.
Organized crime can handle this by having many computers with their own Internet connections in different geographic locations. Often, scripts fail to mimic true human behavior, so organized crime networks use Trojan code to turn the average person's machines into zombie computers and use sporadic redirects or DNS cache poisoning to turn the oblivious user's actions into actions generating revenue for the scammer. It can be difficult for advertisers, advertising networks, and authorities to pursue cases against networks of people spread around multiple countries.
Impression fraud is when falsely generated ad impressions affect an advertiser's account. In the case of click-through rate based auction models, the advertiser may be penalized for having an unacceptably low click-through for a given keyword. This involves making numerous searches for a keyword without clicking of the ad. Such ads are disabled automatically, enabling a competitor's lower-bid ad for the same keyword to continue, while several high bidders (on the first page of the search results) have been eliminated.
A hit inflation attack is a kind of fraudulent method used by some advertisement publishers to earn unjustified revenue on the traffic they drive to the advertisers' Web sites. It is more sophisticated and harder to detect than a simple inflation attack.
This process involves the collaboration of two counterparts, a dishonest publisher, P, and a dishonest Web site, S. Web pages on S contain a script that redirects the customer to P's Web site, and this process is hidden from the customer. So, when user U retrieves a page on S, it would simulate a click or request to a page on P's site. P's site has two kinds of webpages: a manipulated version, and an original version. The manipulated version simulates a click or request to the advertisement, causing P to be credited for the click-through. P selectively determines whether to load the manipulated (and thus fraudulent) script to U's browser by checking if it was from S. This can be done through the Referrer field, which specifies the site from which the link to P was obtained. All requests from S will be loaded with the manipulated script, and thus the automatic and hidden request will be sent.
This attack will silently convert every innocent visit to S to a click on the advertisement on P's page. Even worse, P can be in collaboration with several dishonest Web sites, each of which can be in collaboration with several dishonest publishers. If the advertisement commissioner visits the Web site of P, the non-fraudulent page will be displayed, and thus P cannot be accused of being fraudulent. Without a reason for suspecting that such collaboration exists, the advertisement commissioner has to inspect all the Internet sites to detect such attacks, which is infeasible.
In 2004, California resident Michael Anthony Bradley created Google Clique, a software program that he claimed could let spammers defraud Google out of millions of dollars in fraudulent clicks, which ultimately led to his arrest and indictment.
Bradley used technology that he created for his other companies that took him five years to develop. Using this technology, he was able to demonstrate that fraud was possible, and was impossible for Google to detect.
Bradley notified Google of this security flaw, and was willing to work with them to close up some of these holes. However, Bradley was offered $500,000 for his software and technology by some of the world's top spammers. With this information, Bradley thought he could put a price of $100,000 on his technology, and offered to sell Google all rights to his technology, and they could make the Internet a better and safer place.
When Bradley showed up to Google's offices, he demonstrated the software for them, and when they asked what he wanted, he had stated that he would consult for free if they wanted to purchase the rights to his technology. He explained the prior offer of $500,000 and said he knew he could get it, but would settle for $100,000 if they wanted to work together.
Bradley returned to Google's offices and was met by United States Secret Service officers who were undercover. They kept asking him what he wanted, and they even pushed a check for $100,000 to him. Bradley stated that this felt like blackmail and was not comfortable with this, and pushed the money away. Just then the Secret Service came in and arrested him.
Charges were dropped without explanation on November 22, 2006; both the US Attorney's office and Google declined to comment. Business Week suggests that Google was unwilling to cooperate with the prosecution, as it would be forced to disclose its click fraud detection techniques publicly.
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.
The Tuzhilin Report produced as part of a click fraud lawsuit settlement, has a detailed and comprehensive discussion of these issues. In particular, it defines "the Fundamental Problem of invalid (fraudulent) clicks":
The PPC industry is lobbying for tighter laws on the issue. Many hope to have laws that will cover those not bound by contracts.
A number of companies are developing viable solutions for click fraud identification and are developing intermediary relationships with advertising networks. Such solutions fall into two categories:
Without the use of costly attribution software, Adriaan Brits a Linkedin trainer, highlighted several metrics that can be compared during audit. He argues that particular cuation should be taken when auditing mobile traffic, due to the increased presence of accidental clicks. 
In a 2007 interview in Forbes, Google click fraud czar Shuman Ghosemajumder said that one of the key challenges in click fraud detection by third-parties was access to data beyond clicks, notably, ad impression data.
Click fraud is less likely in cost per action models.
The fact that the middlemen (search engines) have the upper hand in the operational definition of invalid clicks is the reason for the conflict of interest between advertisers and the middlemen, as described above. This is manifested in the Tuzhilin Report as described above. The Tuzhilin report did not publicly define invalid clicks and did not describe the operational definitions in detail. Rather, it gave a high-level picture of the fraud-detection system and argued that the operational definition of the search engine under investigations is "reasonable". One aim of the report was to preserve the privacy of the fraud-detection system in order to maintain its effectiveness. This prompted some researchers to conduct public research on how the middlemen can fight click fraud. Since such research is presumably not tainted by market forces, there is hope that this research can be adopted to assess how rigorous a middleman is in detecting click fraud in future law cases. The fear that this research can expose the internal fraud-detection system of middlemen still applies. An example of such research is that done by Metwally, Agrawal and El Abbadi at UCSB. Other work by Majumdar, Kulkarni, and Ravishankar at UC Riverside proposes protocols for the identification of fraudulent behavior by brokers and other intermediaries in content-delivery networks.
Manage research, learning and skills at defaultLogic. Create an account using LinkedIn or facebook to manage and organize your IT knowledge. defaultLogic works like a shopping cart for information -- helping you to save, discuss and share.