What is Click-Fraud?
I have and will advise my clients to think very carefully before investing in any pay-per-click advertising program. The main reason for that is click fraud.
How this works is that you bid on a “keyword” which can be one word or multi-word combinations. If you are one of the high bidders your ads are placed on websites whose content is related to your target customers. Then when someone clicks on one of your ads your account is charged accordingly. These clicks can range anywhere from a couple of cents to in the case of very competitive keywords several dollars. That money is then split between the company and the page owner. No one really knows for sure how many of these clicks were only intended to collect the commission.
While I do use them on my site (you can see the Google ads on this page) and placing the ads on your site is fine (if you don’t mind the risk of losing your visitor) I don’t advise my customers to buy into any pay-per-click campaign unless they are willing to track (or pay someone to track) every click, visitor, and sale. You need to know exactly what your return on your investment (ROI) is. This can be a daunting task, sometimes more than a full time job.
Here are a couple of great articles on the subject.
Bruce Schneier writes
Google’s $6 billion-a-year advertising business is at risk because it can’t be sure that anyone is looking at its ads. The problem is called click fraud, and it comes in two basic flavors.
More…
Another good article by Adam McFarland from the web designers point of view
Are Made for AdSense Sites Ruining Search Results?
