3 Ways to Stop Click Farms From Draining Your Ad Budget Learn about click farms and how to stop them from draining your business' ad budget.

Fake products hawked by influencers. Shady merchandise on Facebook marketplace. The internet is filled with fraudulent schemes. Among these bad actors are click farms, a particularly sinister fraudulent act aimed explicitly at draining businesses' advertising budgets. Juniper Research estimates that U.S. businesses will lose over $23 billion to this type of ad fraud scheme by the end of the year. Here's what you need to know about click farms and three quick ways to stop them from hurting your business.

What is a click farm?

A click farm is a physical location where a large group of workers spends their days manually clicking on paid advertising at scale. These clicks inflate the ad's traffic and impressions, resulting in zero sales since these fraudulent clicks do not convert to sales.

How do click farms work?

Click farms generate a large volume of "real human" clicks. Bots are better suited for achieving this goal, but websites are better at detecting bot clicks through CAPTCHA and other preventive measures. However, the human element makes all the difference with click farms, as click farm activity is harder to detect.

Here's how the process works.

• A click farm worker sees as an ad
• They click on the ad
• They'll perform the necessary action (download an app, fill out a form, like a post, follow an account, etc.)
• The attribution system reads the click as valid and charges the advertiser.

The click farm worker repeats this process for every ad, with some going so far as to create fake profiles using stolen identities online.

Take, for example, the $50 billion click farm problem plaguing China. According to Yahoo Finance, there have been reports of click farms housing and operating as many as 17,000 phones simultaneously used to perform clicks based on the buyer's request. This recent rise in click farms in the urban areas of China has affected global advertising. In the U.S., $62 million out of $407 million in ad spend per user was wasted due to ad-fraud schemes.

How to detect click farms on your ad

One way to detect whether click farms are draining your ad budget is by monitoring your traffic activity. Typically, click farms have the same pattern when "click farming" an ad. They share the same phone model, IP address, device, geolocation, browser versions, etc., in large numbers.

Once you notice you're getting clicks from a particular region and they all have the same pattern, check your engagement metrics. Ideally, any platform running ads would allow you to see how your ads perform. It may be a click farm attack if you notice a sudden spike in traffic and a high click-through rate but zero conversions.

Effects of click farms on ad campaigns

Wasted ad spending: This is often the most noticeable impact of click farms on ad campaigns. Due to the fake clicks, advertisers quickly rack up charges that drain their ad budgets. Take an ad running on Google. A competitor can hire a click farm to drive false clicks to your ad. This drains your ad budget with little to no returns. And once you can no longer fund your ads, Google takes you off their platform.

Skewed marketing data: Making accurate marketing decisions relies on evaluating past results and determining the weak and strong points to inform future strategy and improvement. Once this data is compromised with fake clicks, the marketing data becomes useless — without it, advertisers have difficulty running ads that will effectively convert traffic into sales.

Related: How AI Is Addressing the Fraud in Advertising: Here's What You Need to Know

How to combat click farms

1. Enable restrictive geo-targeting

To get the best results for your ad, you have to restrict displaying ads to users in certain regions of the world known for click farms. You can easily set this preference up on any ad platform. Alternatively, you can also block specific IP addresses from accessing your ads. For example, if you notice a sudden spike in clicks from IP addresses in Hong Kong, you can block those addresses.

2. Opt for tasking pre-qualification challenges

CAPTCHA challenges for human verification aren't as compelling — or complex — as they used to be. In less than 5 seconds, click farm workers can bypass the challenge of accessing your ads. However, creating a tasking challenge that requires complete concentration frustrates the workers, hence preventing them from draining your ad budget since they can't do it at scale.

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3. Avoid fraudulent publishers and ad platforms

Sometimes, the click farms draining your ad budget are directly from the publishers or supply-side platforms you use. These platforms advertise ad space promising high traffic, clicks, views and impressions to help you connect with your audience. Meanwhile, the traffic they're promising is from click farms. Avoid this scheme by working with ad platforms and publishers that use ads.txt.

ds.txt, which stands for Authorized Digital Sellers, is a text file allowing publishers to list resellers of their ad inventory. As an advertiser, this list is essential in deterring fake traffic and clicks from eating up your ad budget. Ads.txt benefits include safeguarding advertisers from bogus ad inventory and more accessible matching seller IDs during bid requests.

To summarize the pervasive click farm problem: The overall demand for clicks and user attention is a booming industry that, unfortunately, continues to attract bad actors. Ad networks generally offer some level of protection to all advertisers, but click farms have developed sophisticated systems to bypass this protection. While there's no single solution for eliminating click farms, utilizing the abovementioned strategies will prevent ad budget losses on fraudulent clicks.

Related: How Ad Fraud Ruins the Internet