Click fraud is documented as a threat to Google’s business model in the company’s IPO filing and Google CFO George Reyes’ comments in December: "…something has to be done about this [click fraud] really, really quickly, because I think, potentially, it threatens our business model". Inevitably, some barely-informed commentators have wiped-up a frenzy of hype around click fraud, with some even describing it as a “Google killer”.

Click fraud: What is it?

Click fraud occurs when a pay per click advertising link is clicked on for a malicious reason – in other words, by somebody that isn’t interested in the products, services on content the advertiser’s website.

Types of click fraud - and who carries it out

1. Affiliate fraud

Search engine affiliates are websites that implement results from a search engine onto their websites. Legitimate examples of this include the WSJ, which displays contextual PPC adverts from Overture, and Search.com, which uses search results from Google.

Affiliates like these receive a share of each click on a PPC advert from the PPC engine. Affiliate fraud occurs when an affiliates seeks to artificially increase the number of clicks on paid listings and so increase the revenue they earn. They do this by manually clicking on the links, paying other people to do this for them or using automated software to click on links. Typically they will target terms with high bids.

2. Competitor fraud

This occurs when one company clicks on a competitor’s advert to spend their budget with the longer term aim of making PPC advertising too expensive for them – and therefore removing a competitor from the search engine results.

3. Unintentional fraud

This happens when a piece of software clicks on a link without the intention of costing the advertiser money – for example, a search engine spider might follow a PPC link on a web page whilst crawling it. Well-designed websites will endeavour to avoid this and the better PPC engines will detect these clicks and not charge advertisers for them – but they do get through. Link checking software can also click on PPC links.