Click fraud is one of the biggest issues in the pay per click industry right now. It's easy to understand why, too click fraud costs advertisers money, but gives no return. It cuts deep into profit margins, and in some cases, may be the difference between making money and losing money.

Click fraud is, at its simplest, clicks on ads that are not generated by a real person interested in making a purchase. Click fraud can come from many different sources:

Click bots, which are robots designed to click on ads, are one source. Click bots are often run by an affiliate of the PPC search engine.

Competitors may click on your ads to try to drive your cost up.

Click schemes are programs people join to click on ads for each other. Usually these people are affiliates of the PPC search engines.

Combating click fraud can be tough. One of the easiest ways to combat click fraud is to not advertise on search engines who deliver lower quality traffic. This factor is easily determined with conversion rates. If one search engine's traffic converts at 2 percent, and traffic from the second search engine converts at 1 percent, you know the traffic from the second search engine is half the quality. Click fraud is likely one of the factors involved.

In addition to such basic tracking mechanisms, you can use more advanced tracking mechanisms to try to catch click fraud. For example, you could use a script that you would gather data on visitors from PPC search engines (data might include IP address, number of times they clicked on the ad, and time they spent on the site) and use that data to pick out suspicious visitors. You can then submit the data to the search engine and request a refund on the traffic.

Click fraud is probably the biggest problem in the PPC industry, and you can work to save yourself some money by combating click fraud.