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Ecommerce and click fraud

How Click Fraud Impacts E-Commerce Businesses

Our State of Click Fraud in SME Advertising for 2020 found that on average, pay per click ads are hit by an average of 14% in fraudulent clicks. However, even this level of fraud varies depending on factors such as industry and location. 

So, we’re going to break it down and look at how click fraud affects specific industries.

In this post, we’re looking at e-commerce. 

The growth of e-commerce

During 2020, and the huge global impact of the coronavirus pandemic, many industries were turned upside down. 

It turns out that being locked down at home didn’t dampen our appetite for shopping, with many industries seeing 2020 as the best year ever. In fact, e-commerce businesses spent $58.5 billion on internet advertising during 2020. 

E-commerce was one of the biggest beneficiaries of the disruption caused by Covid-19, growing by 19%, which is beyond the estimated growth of 18.4%. (source)

As a consequence of this increased online activity and ad spend, click fraud also had a very successful 2020. Research from Cheq and the University of Baltimore found that the early predictions of $24 billion lost to fraud were quickly exceeded, with the final impact estimated at around $35 billion.  

In fact, during the early global lockdowns from March to May 2020, click fraud activity surged by 21%.

E-Commerce sectors affected by click fraud

The cost of click fraud for e-commerce businesses sits pretty much on the average rate. Retail sees a rate of fraud around 13.4%, travel sees a higher rate of around 26.48% and software is a little lower at 9%.

Retail and general merchandise searches account for some of the biggest search volumes online, with brand searches such as eBay (100.1 million/day), Walmart (64.8 million/day) and Home Depot (42.6 million/day) the most popular. 

In fact, shopping related search terms make up 10% of the total daily searches online. (source)

Although the cost per click for most of these industries is normally a few cents, they’re still a popular target for bots and click farms.

Recent data from Cheq also reveals that around 10% of all clicks on e-commerce ads are from bots. Across the sector as a whole, this adds up to around $3.8 billion lost to click fraud. 

Some of the attractive factors about e-commerce for click fraudsters is the competitive keywords, price surges and popular shopping periods. In short, there are plenty of money grab opportunities for click fraud when it comes to e-commerce.

Put a stop to click fraud

The issue of click fraud continues to grow year on year, despite the efforts of the digital advertising industry. With $35 billion lost in 2020, and that figure likely eclipsed in 2021, preventing click fraud for your ecommerce business continues to be a challenge.

And for the competitive sphere of ecommerce, click fraud can be damaging to both your budget and your potential to win new customers.

Yes, there are measures used by the big ad platforms, such as Google. But the elephant in the room in the digital marketing sector is that fraud is still a huge problem. So, what can you do?

As the industry leading click fraud prevention solution, ClickCease offers the most effective way to block click fraud. From organised bots clicking for criminals profit, to sneaky competitors trying to run down your ad spend.

Try out our free 7 day trial and see if ClickCease works for you. 

Read more about click fraud in our quick guide, or if you have the time, our complete guide to click fraud.

Oli

Since working for ClickCease, Oli has become something of a click fraud nerd, and now bores people at parties with facts about click farms and internet traffic stats. When not writing about ad fraud, he helps companies to optimise their marketing content and strategy with his own content marketing business.

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