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How prevalent is click fraud?

No one knows exactly what percentage of clicks are fraudulent, but estimates range from a few percent to more than twenty percent. Click fraud varies widely from industry to industry, and depends on several variables including the category, the number of competitors in the field, and the cost per click. For example, a competitor is much more likely to maliciously click on your ads if you are paying $2 per click than if you are paying $.20 per click.

This graphs shows the number of times the search phrase "Click Fraud" was used over time.