PPC Click Fraud
PPC Click Fraud is the action of somebody clicking on your ads despite having no intention of visiting your site or making a purchase; the reasons for doing so can vary, but the end result is that it costs you money while delivering absolutely no financial benefit from your PPC advertising. In reality there is very little you can do yourself to protect against click fraud except ensure that the PPC advertising network you work with is proactive and reactive in its action against click fraud.
It is possible to use your own tracking code on your web pages allowing you to track information regarding the traffic that is delivered by your PPC ads. This may highlight some pattern behind clicks that you believe to be partaking in click fraud and you can then report this potential fraud to Google, Overture, or any other network you are using. All the major networks offer some form of protection against click fraud because they recognise that it is a major problem that could also cost them their reputation as well as you your money.
There are two main reasons that people click on ads in this way – their own financial gain and your financial loss. Competitors may click on competitor's ads in order to cost them money and even deter them from competing for the same high volume keywords. Also, publishers that display your ads on their own sites (if you have signed up for this increased exposure) may attempt to earn themselves extra revenue by clicking on your links as displayed on their own website.