Click fraud is an enormous drain on the resources of advertisers, both national and international. It is estimated that 30% of funds advertisers spend on ads goes to publishers who commit click fraud. A great amount of unnecessary funds are being siphoned off to fraud and advertisers are threatening to discontinue advertising through applications like AdSense. Search engines who are feeling the pressure to devise a solution for this problem are forced to spend a great amount of time and effort to do just that.
Search engines and other providers of PPC (pay per click) programs have introduced algorithms that generate IP address repetition. These formulae recognize suspicious click patterns borne from a singular IP address and help pinpoint click farms, competitor-led sabotage and those who commit potential fraud. However, identifying those who are potentially committing fraud is difficult even with the introduction of these algorithms. If a dialup modem, a DSL line or cable modem is used in committing fraud, they are difficult to track because these types of connections generate new IP addresses with every new online session. In addition, an extensive range of software is available to alter IP addresses, which renders the algorithms useless to track someone who commits click fraud.
Comprehensive software which profiles and reports on browsing habits is in development. This software will enable companies to track and monitor suspicious behavior. However, some view these applications as intrusive and unreliable. Because of the vast coverage of ads across the Internet, fraud that is not committed on a large scale will continue to be unnoticed. Recently, Google was forced to face the enormity of this matter when the company was served a class action lawsuit that cost them $90 million to settle. Due to this settlement, Google is being viewed as taking some responsibility for their contribution in the problem that click fraud is posing.
Individual companies have a number of available options that they can use to ensure that they are not suspected of committing click fraud. The two best options are search engine optimization and organic listings. If a site employs good SEO, it could achieve a natural ranking that other sites achieve through PPC ads. The same is applicable to listings that are ranked high organically. The costs associated with PPC are not applicable to these sites because they do not have to pay click-through rates. SEO does require more work and takes a longer amount of time but it pays off in the long run. These sites will not be paying the average 30% of their profit to click fraud, so they are able to reinvest that revenue into a more beneficial endeavor.
An effective means of preventing click fraud must somehow be developed and implemented and it must be done as soon as possible. While click fraud is prevalent and connected to PPC advertising markets, these markets will steadily lose buyers due to the waning confidence in the program. These buyers will no longer be involved with the search engine market which has the possibility of threatening the online economy as a whole due to loss of revenue from advertisers and PPC companies.