PPC Click fraud puts Fortune 500 companies at risk of losing of millions of dollars
Our newest research reveals that the world’s largest companies allocate billions of dollars to PPC advertising and are at risk of losing millions due to click fraud. Which companies are the most affected? How much are they spending and how much might they lose? Find out below!
First, let us give you a brief intro on click fraud and its effect on advertiser’s PPC budget. If you already know it, feel free to navigate to the following sections:
While there many forms of digital advertising, the world’s biggest and most successful companies choose to allocate billions of dollars to PPC. It makes sense – pay-per-click advertising is highly effective and holds plenty of benefits.
However, it also comes with a bunch of risks, and click fraud is among the biggest ones. Wasteful clicks might come from bots, click farms, competitors accidental or repeated clicks without a genuine interest in the offer of the PPC ad.
The click fraud rate varies per industry – there are highly competitive industries that might receive over 20% fraudulent clicks (out of all PPC clicks) and there are low competitive industries with the click fraud rate below 10%. On average, 14% of all PPC clicks could be fraudulent, in which case 14% of a company PPC budget could be wasted. This is the assumption we used for the estimates mentioned below.
Top 5 companies with the largest PPC budget & their potential losses
$680 million
Yearly PPC budget estimate
$95 million
Yearly loss estimate due to click fraud
$527 million
Yearly PPC budget estimate
$73 million
Yearly loss estimate due to click fraud
$343 million
Yearly PPC budget estimate
$48 million
Yearly loss estimate due to click fraud
$261 million
Yearly PPC budget estimate
$35 million
Yearly loss estimate due to click fraud
$244 million
Yearly PPC budget estimate
$35 million
Yearly loss estimate due to click fraud
Total losses for top 20 PPC spenders
Between Oct 2020 and Sep 2021, the Fortune 500’s top 20 biggest PPC spenders spent an average of $3,468,676,319 on pay-per-click advertising.
Assuming that 14% of this amount could be lost due to click fraud, it amounts to $485 million losses.
How much does Apple spend on PPC?
You might have been surprised to not see Apple among the top PPC spenders, given that it’s the world’s biggest company worth $2.456 trillion.
Surprisingly, it spends a relatively small amount of its marketing budget on PPC advertising. In the last 12 months, it spent an estimate of $68 million, which is just a tenth of the PPC ad spent of Google. It could potentially mean around $10 million of losses due to click fraud.
PPC Shield research methodology
To calculate these estimates, we used the data from the data analytics platform Semrush and a list of primary consumer-facing domains of all Fortune 500 companies. We selected the time range between October 2020 and September 2021, which gave us a 12-month estimate.
The PPC budget estimate was calculated based on an average of click through rates and the positioning of the domain on Google Ads.
The budget loss estimate was calculated based on the assumption that an average of 14% of the total PPC ad spent might be lost due to fraudulent traffic.
TL;DR: key takeaways on PPC click fraud losses of Fortune 500 companies
- On average, PPC click fraud is estimated to cost 14% of a company’s ad spend
- In the last 12 months, America’s biggest companies could have lost over $700 million due to PPC fraud
- Google has the largest estimate PPC ad spent of $680M, which could mean $95 million of potential loss
- Dell is the second biggest spender ($527 million of PPC ad spent and $73 million of potential loss)
- Amazon is the third ($343 million of PPC ad spent and $48 million of potential loss)
- Between Oct 2020 and Sep 2021, top 20 biggest spenders in Fortune 500 have spent an estimated $3.4 billion on PPC advertising
Interested in this research? Stay tuned for more insights to be revealed soon!
