What is Internet Click Fraud?

As search engine marketing becomes more prevalent and contextual pay-per-click advertising appears on an increasing number of web sites, a new type of fraud is emerging - click fraud. What is internet click fraud? Click fraud refers to online clicks or site visits that users make for fraudulent reasons, most commonly for financial gain or to be detrimental to a competitor.

About online advertising
First, in order to understand click fraud, it is important to know how online advertising works. Many of the advertising rates on the Internet are calculated based on the number of clicks an ad receives or by impression; an impression is a single exposure to an ad. The major online advertising companies (Google and Yahoo's Overture are the most well-known) track these clicks and impressions, charge their advertisers based on that tracking and also pay revenue to the sites that display the ads. The principle behind this advertising system is that clicks and impressions translate to visitors, who in turn can translate to revenue for a web site.

How does click fraud work?
People take advantage of online advertising and perpetrate click fraud by clicking on ads and visiting web pages when they have no interest in the ad's product or service. This is not just a problem of a site owner clicking on a couple of his advertisers' links out of curiosity or in order to see a few pennies appear in his account. Fraudsters have used web bots to visit sites repeatedly and have hired cheap labor to manually visit sites and click on links.

Fraud for revenue inflation
Many web sites earn money by selling advertising space and displaying content instead of directly providing a service or product for sale. So, the more clicks and impressions their sites get, the more revenue they receive. In this type of click fraud, people are trying to unscrupulously inflate their income by making false clicks on the advertisements on their sites.