Click fraud is currently a major topic in online advertising. Many argue that it presents a threat to the stability and viability of pay-per-click (PPC) advertising. In actuality, click fraud is not a significant issue at all.
Click fraud occurs when ads are clicked for reasons other than a genuine interest in learning more about the product or service advertised. Google have developed sophisticated technologies to detect click fraud, their systems are.
The real question is how much does click fraud actually damage the PPC industry? Gross fraud, i.e., when one person or technology consistently and repeatedly clicks on an ad, aside, Google can easily detect, we believe that click fraud has no real impact on the industry.
Efficient market theory says that it is impossible to “beat a market” because prices already incorporate and reflect all relevant information. As the PPC industry has matured, efficiency has begun to take root. That is, the price of each keyword has been driven up to the point where it reflects the highest price an advertiser is willing to pay for a click.