Click fraud is the practice of clicking on ads with no intention of buying from the advertiser. These clicks can be generated either manually, by humans - low cost workers hired in China, India and other countries to click on text links or employees of companies hired to click on rivals’ ads - or automatically, by ’bots - online robots programmed to click on advertisers’ links displayed on websites or listed in search queries.

Those engaged in click fraud are motivated by a variety of factors: employees clicking on rival companies’ ads are most likely attempting to drive up costs to eliminate industry competition; low cost workers may be hired by a blogger to click on “Google” Ad-Sense ads displayed on the blogger’s site so as to exponentially increase that blogger’s revenue ; ’bots are often programmed to systematically click on ads in order to create fraudulent, “low-quality” traffic and thus hurt the network itself by causing cost-per-click (CPC) prices to plummet.

To fully comprehend the potentially devastating consequences of click fraud, one should first have a cursory understanding of the cost-per-click (CPC) / pay-per-click (PPC) online advertising business.

By definition , PPC is an arrangement in which webmasters (operators of websites), acting as publishers, display clickable links for advertisers in exchange for a charge per click (i.e. Google AdWords). Additionally, a number of advertising networks act as middlemen between other webmaster publishers and advertisers (i.e. Google AdSense and Yahoo! Search Marketing). In this case, each time a web user clicks on an ad, the advertiser pays the advertising network (Google AdSense or Yahoo! Search Marketing), who then pays the publisher a percentage of that revenue.

One form of click fraud that has recently become popular is impression fraud. Because Google and other engines rely on an AdRank method of determining an ad’s relevance (AdRank being a complex algorithmic formula which utilizes clickthrough rate, among other factors, to determine an ad's rank in search engine results), a competitor can, by simply pausing his campaign, cause a sudden surge of fraudulent impressions on your keywords. As a result, AdRanks for competing ads - including yours - plunge, due to the fact that Google and other search engines, via the AdRank formula, permit only a certain number of impressions before keywords are

How does it Affect Me?
As a franchisor or franchisee, you have a vested interest in market performance and integrity. Like any business, you want to be able to successfully reach consumers through advertising. Given the fact that search engine online advertising is reputedly deemed the advertising medium of our age - rather, internet ads displayed with specific keyword searches have been proven to be the most cost-effective, user-friendly and ultimately successful advertising medium - the potential drain on your budget as well as the probable damage to the integrity of the search engine mechanism due to rogue clickers interferes significantly with your marketing goals.

Can it be Stopped?
Good question; the answer is, I’m afraid, a complicated one. Yes, click fraud can be stopped - but whether it can be stopped without shutting down or, at the very least, seriously altering the entire online advertising business is less certain.

On a promising note, Google, Yahoo-owned Overture and other search engines are busy perfecting anti-click-fraud technologies. While the automated clicks of ’bots are easy enough to detect, the manual, random clicks generated by humans are harder to distinguish from legitimate clicks. By examining sites that generate a large number of clicks but not sales and analyzing Web traffic logs and user behavior, search engines are doing their best to isolate and weed out fraudulent click activity.