The costly truth: How click fraud is stealing your Ecommerce ad spend

Click fraud has fast become the silent ad budget killer of ecommerce, a prevalent menace that’s mostly been left to run rife and unchecked. 

In fact, brands are losing millions of dollars every year to fraudulent ad clicks, some without even knowing it. 

Studies suggest that between 17-22% of all paid search clicks in the retail sector are fraudulent, quietly siphoning marketing budgets, delivering zero return and ultimately, costing unnecessary time and money to the businesses targeted. 

Additionally, research shows that 10% of all clicks on ecommerce ads come from bots, quickly and maliciously inflating ad spend without generating real sales or conversions.

For social media ads, the situation is even worse - invalid clicks on platforms like Meta and TikTok Ads can exceed 25%, especially during peak sales periods when competition for visibility is at its highest and everyone bids for the lucrative top spot. 

Google Search plays a massive role in online retail, with approximately 46% of all Google searches being related to retail or ecommerce. This means that fraudulent clicks in this space have a massive financial impact, leading to significant wasted spending.

For brands relying on PPC (pay-per-click) campaigns to drive sales, click fraud isn’t just a minor inconvenience, it’s a ticking time bomb slowly eroding your ROI.

Competitor clicks, sophisticated bots, fraudulent affiliates and promo code abuse all play their part in gaming the system, inflating costs, and corrupting valuable customer data. If left unchecked, this hidden drain on ad spend could mean higher acquisition costs, wasted remarketing efforts, and less genuine buyers in the sales funnel.

So, how does click fraud work in ecommerce? Why is it so prevalent? And more importantly, what can you do to stop it? Let’s break it down.

What is click fraud in ecommerce?

Click fraud occurs when an online ad is clicked by a ‘non-genuine source’, creating artificial engagement without genuine interest - this is also referred to as an ‘invalid click’, and they’re really frustrating for businesses looking to claim a foothold in the online ecommerce space.

We’re not talking about that fat fingered moment when you click on the wrong ad and tap the back button frantically, although that in itself does end up costing the advertiser, we’re talking about malicious clicks designed to deplete advertising budgets and distort campaign data, leading to wasted spending and ultimately, skewed decision-making.

It’s worth noting that not all invalid clicks are malicious, some naturally occur from legitimate potential customers engaging with one or more ads, or even across different ad platforms. However, the rise of sophisticated fraud networks means that a significant portion of invalid clicks are deliberate attempts to manipulate ad performance and extract financial, or for competitor clicks, improved placement gains.

The most affected ad types in ecommerce are:‍

• ‍Search Ads (Google, Bing Ads) - Targeted by competitor clicks and bot networks due to their high CPC (cost-per-click). We all Google products and see relevant ads alongside similar products, but what you might not know is this is all based on a bid-based system making it a lucrative advertising type for both ecommerce businesses and fraudsters alike. 
• Display Ads (Google Display Network, Programmatic Ads) - These are heavily impacted by bot traffic and false impressions and typically contribute towards the lack of trust within Display advertising. Similar to Search Ads, Display Ads are also part of a bid-based system, where advertisers compete for ad placements across websites and apps.
• Social Media Ads (Such as Meta, TikTok, Instagram, Pinterest & more ) - A problematic hotspot for invalid clicks from click farms and bots that’s all too front row and centre given how often we scroll through social platforms and see repeatedly suggested ads…again and again.
• Shopping Ads (Google Shopping, Amazon Sponsored Ads etc) -  These ads are especially vulnerable to competitor manipulation. Rivals deliberately click on these ads to drive up CPC, draining budgets and making it more expensive to compete for the top placements. 

What makes click fraud so prevalent in ecommerce?

A brand’s digital presence is crucial for sales, recognition, and overall business growth, but with that exposure comes a downside: the inevitable risk of click fraud.

Fraudsters, competitor clicks, and bad actors continually find new ways to exploit PPC (pay-per-click) advertising, draining budgets and tainting valuable customer data. As Ecommerce businesses invest more in ads, they become increasingly vulnerable, creating a vicious cycle that’s hard to break.

Here are a few key reasons why ecommerce continues to be a prime target for click fraud:

1. High PPC (pay-per-click) dependence: Brands often rely heavily on paid search and social media ads for visibility, conversions and brand growth. Fraudsters exploit this dependence, targeting high CPC (cost-per-click) industries such as luxury goods, health and wellness and finance & loans, where their actions will have the greatest financial impact.
2. Competitor clicks: Think your competitors don’t trawl your website, closely follow your social media or click on your ads? Think again. This type of fraud is particularly rampant in high-margin product categories like fashion, electronics, and luxury goods and an easy way to exploit a businesses ad budget.
3. Affiliate temptation: Fraudulent affiliates manipulate tracking systems by driving fake clicks to earn commissions. This results in brands paying for traffic that never converts into real customers.
4. Bot traffic: Sophisticated bots can easily mimic human behaviour, whether that’s clicking on multiple elements of a page, completing web forms or adding products to carts - they’re designed to drive up costs and corrupt your ads audience data.
5. Click farms: Think of click farms and it’s easy to imagine hundreds of low-cost human workers, often in developing countries, hired to click on ads en-masse, but the reality is a little more…technical. Take a look inside the real truth of a click farm here to learn more about how click farms operating at scale can easily target ecommerce brands.

Understanding the technical methods of click fraud

Understanding how click fraud operates on a more technical level is essential for Ecommerce businesses looking to protect their ad budgets and optimize their marketing efforts. 

Fraudsters use various methods to deceive advertisers and manipulate data. Here’s a breakdown of some common tactics:

• Bot mimicry: Bots are becoming increasingly sophisticated, with algorithms designed to replicate human behavior as closely as possible. They can simulate natural actions such as varying the time between clicks, scrolling through different pages, and maintaining session durations that look typical. Without the right technical solutions to detect bots, it can be difficult to spot deceptive tactics, like mimicking different device types or operating systems to evade detection.
• Geographic concealment: Fraudsters often rely on proxy servers and VPNs to conceal the real IP addresses of fraudulent clicks. By routing traffic through various geographic locations, these tools make it appear as though clicks are coming from legitimate users, masking the origin of the click and making it harder for ad platforms to filter out invalid traffic.
• Fingerprinting evasion: Fingerprinting is a technique used to track a user's device or browser based on unique details like screen size, browser type, and location. To evade detection, fraudsters try to change or hide these details, making their devices appear different from the original ones. Without specialized third-party tools to track these changes, it becomes harder to spot these fraudulent activities.
• ‍Secretive clicks: Click injection occurs when fraudsters use malicious apps or software to secretly trigger clicks on ads while users are interacting with their devices. These fake clicks are made to look like legitimate user actions, making them difficult to detect. Since the clicks are tied to real user activity, identifying them usually requires third-party detection tools.
• The stacking trick : Ad stacking is a tactic where fraudsters hide multiple ads on top of each other or under other content. The ads are clicked by bots, inflating clicks counts and ultimately, wasting ad budgets. Detecting this requires tracking where clicks happen on a page to ensure they come from actual user interactions and not.

The true impact on ecommerce brands

Fraudulent clicks can severely hinder both the immediate product performance and long-term success of ecommerce brands. By distorting critical data and wasting valuable resources, click fraud prevents businesses from optimizing their ad spend, impacting product performance, and consuming time that could be spent on growth.

Here’s how it could affect your businesses:

1. Financial drain: Fraudulent clicks deplete your ad budget without contributing to actual conversions, leading to higher CPA (cost-per-acquisition) and lower return on investment, ultimately delaying growth and profitability.
2. Distorted insights: Fake clicks skew analytics, causing businesses to make decisions based on inaccurate campaign data. This results in wasted time and effort optimizing for traffic sources that fail to deliver real customers.
3. Inefficient retargetting: Invalid traffic ultimately diminishes the potential effectiveness of any retargeting campaigns and lookalike audiences. If the first clicks were fake, how can you be sure the cost associated with retargetting reaches the right audience?
4. Reactive measures: Detecting click fraud after the fact is like standing and watching a fire burn whilst someone else throws petrol on it. By the time you've identified the fraudulent activity, the damage is already done and you're left to pick up the pieces and deal with the wasted ad spend.

How to spot click fraud in your own ad campaigns

The first step to optimizing your ad traffic is distinguishing between the good and the bad (and sometimes, the neutral). Identifying click fraud early helps you take control of your ad campaigns and helps to ensure that you're only paying for the legitimate ad engagement.

Fortunately, there are a host of methods you can use to detect click fraud in your paid ad campaigns, but it’s worth noting that although PPC channels like Google and Meta have inbuilt features, often they are limited and don’t offer a comprehensive toolkit to detect all types of click fraud.

• Monitor unusual traffic patterns: Sudden spikes in ad clicks with no corresponding increase in conversions or repeat ad clicks in the same geographic locations can all point to signs of click fraud. Ensuring that your ads remain targeted is crucial, so making sure that your ad clicks only occur in locations your products and services are sold is step number one in protecting your ad spend 📉
• Check for high bounce rates: Typically, fake traffic leaves a site quickly, leaving an impression with a low session duration. Even a click that only lasts a second costs a business and where invalid clicks stack up, you can quickly see how a businesses ad budget can become vulnerable. IP and device data can help you spot culprits lurking behind invalid clicks ⏳
• Look for conversion lack of intent : An unusually high CTR (click-through rate) but very low conversion rate is a big red flag for click fraud. Much like with high bounce rates, it’s worth digging into device and IP data to detect trends such as repeat clicks from the same device or IP and geographic anomalies. It’s hard to know if your competitor is clicking on your ads or not, but a high click-through-rate typically suggests negative intent that where possible, should be shut down to prevent future budget drain 🚩
• Monitor timezone mismatches: If a device reports one timezone but the browser reports another, that’s a red flag. Even more suspicious? Impossible travel - when the same user appears to be in two distant locations within a short time 🌎

The 101 of reviewing keyword risks

We’ve discussed a few technical ways to detect potential click fraud in your ad campaigns, but keywords play a big part in the degree of risk you open yourself up to. Some keywords attract high-value shoppers, while others lure in irrelevant traffic or even fraudsters looking to exploit your ad budget - simply put, keywords hugely affect your campaign performance as well as the types of clicks you’re going to get.

If you don’t regularly review your keywords, you might be paying for clicks that have no chance of converting.

Fraudsters and low-intent users often lurk behind certain search terms. Words like “free,” “cheap,” “jobs,” or “how to” can invite non-buyers, competitors, or even bots that inflate your costs without adding value.

By analyzing your search terms report and using negative keywords strategically, you can filter out unwanted traffic and ensure your budget is spent on real potential customers.

Additionally, watch out for misleading intent - some keywords might seem relevant but actually attract users who are just researching rather than ready to buy. 

Ultimately, a proactive and regular keyword review keeps your campaigns clean, efficient, and fraud-resistant.

Want to learn more? You can read our article about keyword retargeting here 👈

How to prevent & mitigate click fraud 

Detecting click fraud is one thing, but stopping it entirely is another. 

When you know what to look for and have the right tools, identifying invalid clicks becomes easier, but blocking them outright is where things can get tricky.

Platforms like Google, Meta, and Microsoft Ads offer some built-in protections, but they come with limitations. For example, Google Ads only lets you block up to 500 IP addresses at a time, which isn’t nearly enough to combat fraud at scale, especially when IP addresses are constantly changing. 

To truly stop click fraud in its tracks, you’ll need to go beyond basic defenses and use a combination of methods or third-party software to stay ahead of ever-evolving tactics used by fraudsters.

Here’s some tips on how to protect your campaigns:

1. Leverage real buying intent: We’ve already discussed how monitoring unusual click patterns can be an invaluable tool in your click fraud defence arsenal, but taking it further than this by constantly refining and adjusting your ad targeting helps you stay ahead of evolving threats while maximizing your return on ad spend.
   
   Refining ad targeting means analyzing which demographics, locations, devices, and behaviors are driving real engagement, then optimizing your campaigns to focus on those high-value users.
2. Maximise audience targeting: Regular housekeeping of your remarketing lists is essential for keeping your ads in front of real potential customers, not bots or fraudulent users who have no real interest in your product or brand. The cleaner your data, the more effective your targeting becomes, helping you to refine your custom audiences, removing suspicious users, segmenting high-intent users and excluding low-quality sources.
3. Block wasteful traffic: If bot traffic or low-quality clicks keep coming from specific locations, devices, or referral sources, exclude them from your campaigns. You can block certain device types within ad platforms, target users who engage meaningfully, and block suspicious IP addresses to minimize wasted ad spend and focus your budget on real potential customers.
4. Leverage click fraud detection software: Using specialized click fraud detection software is one of the most effective ways to stop fraudulent activity before it affects your campaigns. These tools analyze click patterns in real-time, identify suspicious behavior, and automatically block invalid clicks.

Why click fraud software goes beyond manual fixes

Many ecommerce brands attempt to fight click fraud by manually analyzing traffic data, adjusting targeting settings, and excluding suspicious IP addresses and sure, while these efforts can help, they’re time-consuming, prone to errors, and lack the sophistication needed to combat advanced fraud tactics. This is where dedicated click fraud detection software takes things to the next level.

• Real-time fraud prevention: Instantly detects and blocks fraudulent activity, protecting ad budgets and preventing fake traffic from distorting ecommerce ad campaigns ✋
• Advanced fingerprinting: Tracks unique device and browser traits to identify fraudsters using VPNs and proxies to manipulate online transactions.
• Automated blocking: Continuously updates device, IP and domain block lists, preventing fake accounts, bots, and repeat offenders from exploiting ecommerce platforms ⛔
• Seamless tracking updates: Automatically updates PPC tracking templates for Google and Bing Ads, ensuring accurate fraud detection and campaign efficiency.
• Fraud trend insights: Detailed reports on fraudulent behavior, helping retailers refine ad strategies, reduce losses, and safeguard marketing ROI 📈

The takeaway

Click fraud is silently draining ecommerce brands of their ad budgets, skewing data, and leading to misleading insights that ultimately hurt businesses decision-making. 

Conflicting and fraudulent clicks not only waste money but also distort keyword performance, making it harder to optimize campaigns effectively. The only way to stay ahead is to actively detect and prevent fraudulent activity before it eats into your budget, damages your marketing strategy and your brand's performance. 

Want to see how much fraudulent or invalid traffic your ecommerce store is getting? 👀

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