Online advertisers can put a ton of money into pay-per-click (PPC) advertising. Done right, and with a click fraud detection solution in place, PPC can generate very nice returns. Yet ad campaigns can turn into money pits when click fraud is involved. When the fraud is non-contracting party fraud, the damage can be especially harmful.
Two Click Fraud Categories
According to Fraud Blocker, there are multiple types of click fraud online advertisers need to be concerned about. They can all be divided into two categories: contracting and non-contracting party fraud. What is the difference?
- Contracting Party – Click fraud perpetrated by a contracting party is fraud perpetrated by a company the advertiser is paying to place its ads. A rogue publishing platform that engages in click fraud to drive ad revenues is the perfect example of a contracting party.
- Non-Contracting Party – Click fraud perpetrated by a non-contracting party is perpetrated by an individual or organization not being paid by the advertiser for services. The motivation is generally competition related or malicious vandalism.
Non-contracting party click fraud is less common than its contracting party counterpart. Nonetheless, it is every bit as damaging.
Non-Contracting Party Examples
It would probably be easier to understand non-contracting party click fraud by looking at some examples. The following examples were provided by Fraud Blocker:
1. Eliminating the Competition
The first example involves eliminating the competition so that one advertiser becomes the sole advertiser in that particular space. Company A will engage in click fraud for the purposes of exhausting Company B’s marketing budget. When Company B has no more money to spend, it goes away.
Companies engaging in this form of click fraud do so with full knowledge that every click represents a charge to the advertiser. Clicks that generate charges but do not convert to sales drain money from an advertiser’s marketing budget. It is only a matter of time before the budget is exhausted.
2. Punishing the Competition
A second example of non-contract click fraud relates to punishing the competition. In this example, Company A generates fake clicks in an attempt to make it look like Company B is actually doing it to boost traffic. A legitimate publishing platform knows it can get into serious trouble for allowing click fraud to continue, so to protect itself, it cuts ties with Company B.
Should Company B end up with a reputation for perpetrating click fraud – even though the company is actually innocent – it may be impossible to continue advertising in the PPC space.
3. Malicious Vandalism
The third and final example involves malicious vandalism. This might be perpetrated by an individual who knows how PPC advertising works and gets a thrill out of generating fake clicks. They do not care about the damage being done. It amounts to digital vandalism no different than spray painting the side of a building.
Another example would involve a customer unhappy with the targeted business for whatever reason. This customer also knows how PPC works. They decide to get revenge by running up the advertiser’s marketing spend without generating sales behind each click. This sort of click fraud is perhaps the rarest form of all. Nonetheless, it does happen.
All three examples paint a good picture of what non-contracting party click fraud is. The perpetrators have no contractual obligations to their victims. They are not being paid to provide a service. They are engaging in click fraud for no other reason than to inflict harm on the advertisers they target. It is a special kind of person that can commit such a crime and still sleep at night.