Click Fraud Costs

It cannot be denied, click fraud costs money. A lot of money, and it’s not going to get better any time soon. Unfortunately, the amount of lost revenue is becoming higher each year. It is estimated that click fraud will cost the UK economy an estimated £20.8 billion by the end of 2018. That figure is estimated to increase significantly year on year with some estimates suggesting that as much as £38 billion a year could be lost within the next decade.

One of the most troubling aspects of click fraud is the prevalence with which it occurs. Regardless of the business type or size, click fraud costs can affect almost any PPC advertiser. Whether it is the local plumber or the large, international corporation trading with budgets numbering in the millions. For example, even financial institutions are affected by click fraud, with one estimation that on average as much as £29,000 is lost through click fraud in a financial year. At the other end of the spectrum, smaller businesses, which will invariably have smaller budgets to work with, can lose hundreds - or even thousands of pounds. That can be the difference between a smaller business or start-up failing or succeeding in its first year.

With these figures in mind, it is concerning that potential users of PPC platforms such as Google Ads would be hesitant to use PPC advertising as part of their wider marketing strategy. It is clear that regardless of the type of business, PPC remains one of the most effective methods to drive revenues up. Compared to methods such as SEO or social media marketing, PPC provides advertisers with the most effective and measurable way to get their products or services to the consumer. As you can see from the chart, on average PPC is the largest channel for small and medium businesses to utilise with 33.7% (or around one third) of all traffic paid search. If businesses were inclined not to use PPC, then the potential loss of revenue to advertisers would be around one third too.

Despite click fraud costs, businesses should not be perturbed by the figures too much. There are now options for advertisers to combat click fraud directly through third party providers such as Click Guardian.