Pay-per-click (PPC) advertising on the Web has proven to be tremendously popular among small business and is one of the advertising industry's fastest growing sectors. But "click fraud" remains a concern among many businesses. Click fraud occurs when a person or computer program imitates a Web browsing person by clicking on an ad with the intent to trigger a pay-per-click charge.

Opinions vary about the extent of the problem, but it depends on the industry and search engine or other side involved. Major search engines are most vulnerable, while the lesser known "vertical" sites that stick to a specific search topic have had less of a problem.

Key things you should know about click fraud:

1. In general, if you advertise in a highly-competitive area, or advertise using moderate to expensive keywords, you could be prone to click fraud.
2. Other factors that you might spot are low conversion rates on your PPC ads, or a sudden increase in the number of clicks that occur on your ads.

Action Steps
The best contacts and resources to help you get it done

Use a third-party fraud detection service

Third-party fraud detection software and services look at everything from repeat clicks from the same origin to odd click behaviors, and can even warn fraudsters that they are being watched. In addition, some solutions can also help you track your return on investment and organize your campaigns.

I recommend: Check out product and service reviews at Click Fraud Services, as well as these products and solutions: ClickProtector, ClickTracks, AdWatcher, Authenticlick Click Fraud Audit and Recovery Service, ClickDefense.com, Click Forensics's free CFAnalytics and the open source AdLogger for Google AdSense.

Learn more about the problem

Click fraud is an evolving issue — as fraudsters get smarter, so does the industry trying to prevent it. If you can't get ahead of the problem, at least you can keep up with it.

I recommend: Read ClickFraudReport.com, ClickFraudBLOG, No Click Fraud and Google's Google Blog.

Consider a pay-per-click alternative

Ingenio is one company that has developed an alternative to the pay-per-click model by providing performance-based ads on multiple platforms, including radio, phone and print. You pay only when your ad generates a validated phone call.

I recommend: See how it works at Ingenio.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  By monitoring the number of clicks on your PPC ads and who is clicking on your PPC ads, a click fraud service can detect when fraudulent clicks occur and help you put a stop to them.
• •  You can usually get a refund from search pay-per-click advertising companies if you can provide strong third-party evidence for fraudulent clicks.
• •  Some click fraud comes from businesses who click on a competitor's ads so that the competitor's advertising budget drops without gaining advertising value.