The two significant reasons for click fraud are; to exhaust the advertiser’s ad budget or to increase the revenue of an ad hosting website. The latter is otherwise called competitive click fraud, and the former is called Inflationary click fraud.

Inflationary click fraud vs. Competitive click fraud can be a little challenging for new marketers and business owners to understand. We explore this deeply in this article and how to handle each one.

Inflationary Click Fraud

Inflatory click fraud is also referred to as “pay-per-click” fraud. Inflatory click fraud is the kind of fraud that artificially inflates the traffic of online advertisements. 

As the name implies, pay-per-click is when an advertiser pays for every click on their ad placement, anticipating potential clients and revenue. 

A fraudster clicks on your ad to create the illusion that it is getting many clicks, but it is doubtful that any of these will lead to revenue for the advertiser. 

Fraudsters also use Inflationary click fraud to boost malicious websites to make them appear legitimate or to allow the website to be higher in search rankings. People commit inflationary click fraud mostly to benefit a website publisher. 

How Does Inflationary Click Fraud Work?

Inflationary click fraud, in most cases, is automated using bots or programs that then appear as legitimate users on a website. The goal of repeatedly clicking on an ad is to trick a platform into thinking a legitimate user intends to purchase whatever product or service is sold on the website. If you are a victim of click fraud, you will notice many clicks coming from a particular IPA. Still, fraudsters have now derived a way of routing bot traffic through different IPAs using a virtual private network (VPN) or other geographic locations to look less suspicious. 

Scammers will often run fraudulent websites created mainly for that purpose.  A site like this will have little or no organic traffic because there is no genuine content for the user to consume. Once the ad is up, the created program or bot generates much invalid traffic and illegitimate clicks, for which the fraudster bills the owner of the associate program.

Types Of Inflationary Click Fraud

Different scammers use various types of click fraud to achieve other ends. Some of these click frauds are 

• Ad fraud: advertisers create a webpage for their ads and fake channel clicks to generate revenue
• Click fraud bots: this fraud generates clicks by automating bots to click on ads.
• Click farm: companies hire people to click on ads all day. This type of fraud is prevalent where labor is cheap.
• Ad stacking is the process of stacking multiple ads on top of each other. This fraud prevents users from seeing ads. 
• Location fraud: this fraud aims to escape detection by using a VPN to change locations.

Other types of inflationary click fraud include pixel stuffing, competitor click abuse, video viewing fraud, and crowdsourcing. Incentivized traffic etc

How To Identify Click Fraud

Some pointers indicate that your website has been attacked by click fraud. Some of these pointers include: 

• Incessant clicks from the same IPA 
• High clicks with shallow revenue conversion 
• Impression rate at its peak while there is a drop in page view

How To Prevent Click Fraud

The following steps can help you prevent click fraud:

• Monitor how often you get suspicious clicks from a particular IPA. This can help you determine who exactly is committing the fraud.
• Use fraud prevention software to detect malicious activity and block BitTorrent traffic.
• Set different ad prices for other websites to help limit financial risk by restricting the amount paid for a single ad.

Competitive Click Fraud

Competitive Click is when a rival business clicks incessantly on a website to deplete its opponent’s ad budget. Healthy competition isn’t destructive, but some competitive practices are highly unhealthy and unfair. Competitor’s click fraud is one of the fastest-growing practices in competitive sectors; however, different competitors use different attacking approaches depending on their industry.

Even though competitors’ clicks are standard, it is a wild guess to think that click fraud only comes from competitors. Some sectors are more prone to competitive fraud than others; here are some of the industries that get hit by competitive fraud the most:

• E-commerce: 

Online gambling and e-commerce are other sectors that experience competitor click fraud. This is usually done by bot traffic clicking on keywords. These bots are automated by fraudsters for specific tasks. E-commerce fraud encompasses attacks on both SMEs and enterprises. E-commerce suffers from about 14% of click fraud.

• Repair Specialist

On-demand repair specialists, such as plumbers, locksmiths, pest control specialists, etc., are among the most hit by competitive click fraud across their campaigns. These specialists suffer about 40% of their competitors’ click fraud. 

• White-Collar Click Fraud

White collar jobs such as law, real estate, etc., experience many competitors clicking fraud to sabotage their opponent. These click frauds are capable of causing significant financial loss to the victims. White Collar click rate is about 20%

Why Do Competitors Commit Click Fraud 

The end goal of a competitor is to cost you money and significantly reduce your ability to compete for ad placement. Unethical competitors commit these frauds to drive up the amount you pay for a search while your pay-per-click ad budget is depleting with irrelevant clicks. The idea is that when you have a lesser amount to spend on legitimate traffic, you become less competitive or eventually get pushed out of the market.

How Does Competitor Click Fraud work?

Competitor fraud is beyond your rival clicking on your ad to cost you money. While small business experience manual click fraud, most advanced competitors’ click fraud deploy automated, sophisticated, and outsourced methods to cause more extensive damage. 

• In-house Clicks: this kind of click is a concern to small businesses, but there can be cases where in-house click fraud is used on a grander scale
• Click farm: companies who don’t want to do their dirty work themselves employ people who will repeatedly click on ads with no intention of converting.  
• Click software: a company can go as far as purchasing software that does click fraud. There are various kinds of this software, but usually, they use VPN to mimic traffic by constantly changing the IPA to avoid detection.
• Botnets: competitors that know their way around technically can use DIY to carry out their click fraud. A botnet is an easy and effective way to carry out an attack.

How To Detect Competitor Click Fraud?

Here are some manual ways to detect click fraud on your website:

• Check IP Address: regularly check your website visitor’s log to see if there is a suspicious click from a particular IP address. When you detect repeated clicks from a specific IP address, you block or add it to the exclusion list.
• Monitor Campaign Activities: Regularly analyze your campaign for suspicious timing or spikes in clicks that do not translate to engagement.  
• Review Your Publisher List: Regularly review your list to check if ads are directed to PTC sites.
• Identify patterns: Pay attention to patterns; if you see anything suspicious, start dealing with it seriously.

How To Stop Competitor Click Fraud 

After identifying that you  might be a victim of competitor click fraud, you can do the following to mitigate the fraud:

• Set up internet service provider and IP address exclusion. 
• Redirect your ad to a campaign targeting specific people interested in your product and services.
• Block suspicious locations, languages, demographics, etc., where suspicious clicks originate.
• Put up campaigns on only high-value websites.

Important notice

There is a limit to what can be done manually; tracking suspicious activities can be costly and time-consuming, and you would have to suffer losses before you even detect the clicks.

Click Fraud protection software is the most effective way to deal with both inflationary and competitor click fraud. It detects and blocks suspicious activities on your website and ads before they cause damage.