The shift that changed everything: From impressions to performance

The digital advertising industry has undergone a fundamental transformation. In the early days of digital advertising, advertisers primarily bought media on a CPM (cost per thousand impressions) basis, essentially paying for eyeballs regardless of outcome. While CPM remains an important metric for measuring reach, advertisers recognized that this metric doesn’t reflect whether advertising achieves its intended results… . As a result, the industry shifted toward performance-based models, where advertisers pay for specific outcomes—clicks, leads, sales, or other concrete outcomes. This shift has enabled advertisers to prioritize return on ad spend, or return on investment, and has become the ultimate measure of value throughout the ecosystem. While this shift promised better accountability, it created a new challenge: click fraud.

In what follows, we explore the stakeholders in the ad ecosystem and how, while there has been a positive shift in accountability, the door remains open for fraudsters to capitalize. 

Why performance-based models changed the game

When advertising was primarily bought on a CPM basis, fraud typically focused on inflating impression counts through techniques such as pixel stuffing or ad stacking. As the industry shifted toward paying for performance, fraudsters adapted their techniques to match. Click fraud emerged as an immediate threat, but it was just the beginning. With advertisers increasingly demanding more sophisticated performance guarantees, fraud has evolved to match each new buying model.

The rise of cost-per-click (CPC) ad buying initially seemed like a step toward greater accountability—after all, advertisers pay only when a user actually clicks on the ad content. However, this created a direct financial incentive for bad actors to generate fake clicks. As buying models evolved further toward cost-per-action (CPA) and other outcome-based metrics, fraudsters developed increasingly sophisticated methods to game these systems.

The industry’s focus on return on advertising spend (ROAS) has inadvertently created a more complex and harder-to-detect form of fraud. Fraudsters now need to understand and manipulate multiple tracking systems, attribution models, and conversion paths. The result is more sophisticated operations that can bypass traditional fraud detection methods by mimicking legitimate customer behavior patterns.

What is click fraud?

Click fraud takes place when automated scripts, bots, or human click farms, generate artificial or invalid clicks on digital advertisements. It’s when human or software entities click on ads without genuine intent. 

While click fraud is just one of many types of ad fraud, it not only allows threat actors to stealthily steal ad revenue but also creates numerous other consequences. These include eroding advertiser trust, wasting ad budgets, distorting campaign performance metrics, billing reconciliation and ultimately undermining the overall effectiveness of advertising.  If left unchecked; click fraud essentially creates a situation where advertisers are paying for fake clicks that don’t translate into true human engagement or conversions. 

The ripple effect: How click fraud damages every player

The number of stakeholders that participate in the ad ecosystem introduces complexity and interconnectedness to the network.

While these digital interactions and transactions exchange money, these transactions rely on trusted behavior among the parties. When a malicious actor engages in click fraud, it erodes that underlying trust, in addition to siphoning money and distorting data. Over time, that erosion of trust can have a dramatic effect on the ad ecosystem, diminishing parties’ desire to transact altogether.

Advertisers. Click fraud creates a cycle that threatens advertisers’ ability to reach real customers. Fraudulent clicks drain campaign budgets meant for reaching real customers. These fake clicks corrupt performance data, leading to misguided optimization decisions. When advertisers optimize campaigns using this polluted data, they unknowingly direct more budget toward tactics and channels that appear successful but will not drive the desired results.

Publishers. Content creators and publishers face a precarious position. Their business models depend on advertising revenue, yet they bear an outsized burden in maintaining traffic and click quality. A single surge of fraudulent clicks can trigger automated quality control systems, potentially creating account suspensions or revenue clawbacks (where reimbursements are required for false clicks and, thus, siphon revenue). These clawbacks don’t just affect future revenue—they can force publishers to return money they’ve already earned and budgeted, creating financial instability and distorting forecasts.

Ad tech platforms. The trust of major platforms—from demand-side platforms (DSPs) to retail media networks and walled gardens—hinges on platforms’ ability to maintain marketplace integrity. When fraud infiltrates these systems, it doesn’t just undermine individual campaigns; it erodes confidence in the entire ad platform to deliver on real business outcomes. Platform operators find themselves locked in an escalating arms race with fraudsters, requiring ever-increasing investment in fraud detection and prevention systems. The challenge goes beyond just identifying bad traffic—platforms must maintain strict quality controls while still delivering the scale and efficiency advertisers demand. 

Promoting ad ecosystem health

Given the complexity and interconnectedness of the ad ecosystem, click fraud’s network effects can be dramatic. When malicious actors engage in click fraud, it undermines the entire advertising ecosystem, even undercutting other advertisers and platforms and reducing the overall effectiveness of online advertising for all parties.

Looking forward

As performance-based advertising continues to grow, the industry needs better standards and tools for detecting click fraud. Success will come from creating systems that can verify genuine user engagement while making fraud less profitable for bad actors.

The challenge isn’t eliminating click fraud entirely. It’s making it difficult and expensive enough that fraudsters look elsewhere for opportunities. By working together, stakeholders can build a more trustworthy digital advertising ecosystem that delivers real value for everyone.

Check out part one of this series on the definition and market impact of click fraud.