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Reports of click fraud with PPC campaigns, especially with Google Adwords, are on the rise, and researchers estimate the numbers are in excess of $1.6 billion as of 2008. Click fraud occurs when a competitor may be clicking on your ads to break your ad budget, or when someone installs a web robot or spider to generate fraudulent clicks on your ads.

Search engine companies and PPC providers, including Google, affirm that click fraud exists and are taking steps to correct the problem. Even though it can be hard to track down the source of fraudulent activities, there are several ways to reduce the risk of it happening with your campaign. Here are some essential tips for preventing PPC fraud with your Google Adwords strategy:

1. Monitor your click-through rates regularly. Google makes it very easy for you to review your click-through rates and conversions. You can print out a weekly or daily report, and keep an eye out for any strange activity. It’s also a good idea to match these to your web site traffic reports where you can see IP addresses and websites that are accessing your site regularly.

2. Set-up a daily budget. Limit your advertising costs on Adwords by setting up a budget. Your budget should be at a reasonable level allowing you to maintain it for several months. If you are a target of click fraud, your losses will only be limited to your specified budget.

3. Set a daily click limit. Bruce C. Brown, the author of the book “The Complete Guide to Google Advertising” suggests that every Adwords manager set up a daily click limit. This allows you to monitor how many clicks are being generated over a period of time, so your ad isn’t just ‘left out in the open’ for anyone to click on. When the click limit has been reached, your ad will simply disappear.

4. Limit your Ads to certain locations. Using the geographic location feature is one of the best methods for safeguarding your campaigns against fraudulent activities. Research where your target market is mostly based and focus on running your ads only in certain countries or regions. It would be a waste of money to run ads on regions you won’t do business in.

5. Be careful in singing up with PPC programs that give away free stuff. As a rule, don’t sign up with programs that are too good to be true. Most fraudsters entice people to sign up with them by offering free downloadable products and services. Look out for programs that ‘monitor’ your keyword campaign. Nevertheless, a lot of hosting companies give out legitimate Google Adwords credit when you sign up with them. Just make sure you’ll be dealing with Google directly to get these credits.

Google employs its own fraud protection team to investigate click fraud cases. Report your case to Google immediately if you think you’ve fallen prey to click fraud.

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