Click fraud levels reach new heights in pandemic

Shifting user priorities in the past 12 months have seen cyber criminals double down on efforts to cheat businesses out of millions of pounds via click fraud, with smaller businesses losing an average of £10,000 a year and enterprises up to £525,000, according to a report.

Click fraud or pay-per-click fraud is defined as the practice of fraudulently clicking on display advertisements to give the false impression that huge numbers of potential customers are clicking through an advertisers’ links. This is usually done using automated bots.

According to statistics gathered by fraud protection platform PPC Protect, which analysed more than a billion ad clicks to compile its annual Global PPC Click Fraud Report, 11% of all search clicks are fraudulent, rising to 17% on connected TV campaigns and 36% on display advertising campaigns.

The firm said this reflected, to some extent, the closure of bricks-and-mortar retail stores for a substantial part of 2020, which caused a pivot to online advertising as companies tried to retain as much of their business as possible. Naturally, cyber criminals also pivoted to follow this activity.

It said the low-risk nature of bot-driven click fraud campaigns was proving highly attractive, with cyber criminal gangs investing heavily in increasingly sophisticated set-ups, allowing them to scale their activity without lifting a finger.

Neil Andrew, PPC Protect founder and CEO, said: “Despite the impact of Covid-19, digital ad spend still increased by 2.4% in 2020 to a record $332bn as consumers turn to the web in their masses to stay informed, in touch and entertained.

“For fraudsters, this is like shooting fish in a barrel. With little effort, they can defraud small, independent businesses relying on online ad spend to increase their presence out of tens of thousands of pounds a year.”

PPC Protect, which has just received a major funding round led by Fuel Ventures, uncovered a number of other impacts on online ad fraud arising from the pandemic.

For example, with home schooling becoming the norm for many, a concurrent rise in ad spend saw the education sector hit by the highest rates of click fraud, with almost one-third of clicks invalid ones. The healthcare sector was also hit hard, with click fraud rates growing by half. Elsewhere, the travel industry saw losses to click fraud drop by one-fifth, fairly unsurprisingly given the collapse of global tourism and business travel.

Despite the increasing losses, PPC Protect said advertisers and marketers were becoming much more aware of the threat that click fraud poses to their ad spending, and are taking it much more seriously than even just a few years ago. Although the industry is a long way from eradicating click fraud, it seems that increased education is having an effect.

Looking ahead to the rest of 2021, the report predicted that click fraud would increase by about 13% year on year, with most of this increase now being driven by connected TVs. In such scenarios, automated bots “watch” ads on YouTube or other platforms, giving the impression of human viewers that do not, in reality, exist. The report said that with connected TV ads exploding in popularity, this was likely to become an ever more lucrative channel for cyber criminals.