If you’re running a small business, you’re probably interested in the revenue that comes from successful advertising. Unfortunately, there’s this pesky thing called click fraud, which causes you to overpay for advertising. So how does this work, and how do you avoid it?

First, a quick definition of click fraud. Essentially, it consists of any clicks on an advertisement that are not legitimate clicks. That is, if the person clicking is not genuinely interested in what the company advertises, it is not a good click. Ads should draw new people looking for something specific. Click fraud occurs when someone repeatedly clicks, when a bot clicks repeatedly, or when a person clicks an ad to reach a website he already interacts with. Essentially, defining something as click fraud depends on the motivations of the people (or bots) doing the clicking.

How does click fraud affect your business? The most problematic consequence is the raised advertising fees (and blowing through your advertising budget). Since many companies pay per click for advertising, click fraud racks up the hits they’re paying for; however, it does not bring revenue to the company. So, net loss.

Who does this stuff, and why? Typically, perpetrators of click fraud include competitors and advertising networks. They usually do it to inflate your advertising costs, either by sending your company over its advertising budget or by increasing the cost of a keyword.

How can you tell if you’re a victim, and how do you avoid it? The telltale sign of click fraud is a sudden upswing in clicks from a single IP address. Usually, you may see a high number of clicks that does not correlate with higher sales. To protect your business, keep a close eye on advertising metrics and target your audience. Watch for a very high number of clicks from a one IP address and look at their timestamps. Directing your ads to a specific audience (rather than the general public) can help reduce the number of clicks from people not interested in your product or service. Ultimately, vigilance is the name of the game here.