Of course it happens, but more times than not, its caught by the engine and no one is penalized. Sometimes the clicks do go through, and you can use your logs to dispute clicks with most of the PPC engines.
That's one reason Overture and Google (the serach affiliate program) are considered the best PPC services and why the keyword prices on those two services are generally higher than on smaller PPC services that don't inspire so much confidence.
I suppose there must be a few advertisers who click on their competitor's ads. But I would be much more worried about the PPC affiliates who get a share of the money generated by clicks on their sites. This is particularly bad at Google's content sites (the AdSense program), where Mom-and-Pop sites can run ads. This is one reason I encourage AdWords advertisers to opt out of content-match, or at least to ensure that they pay less for those ads than ads on the reputable engines in Google's search match service.
I suppose there must be a few advertisers who click on their competitor's ads. But I would be much more worried about the PPC affiliates who get a share of the money generated by clicks on their sites. This is particularly bad at Google's content sites (the AdSense program), where Mom-and-Pop sites can run ads. This is one reason I encourage AdWords advertisers to opt out of content-match, or at least to ensure that they pay less for those ads than ads on the reputable engines in Google's search match service.
Why do you assume that publishers are less honest than advertisers? That's a questionable assumption, if only because it isn't that easy for a publisher to get away with fraud. The sheer quantity of "background clicks" required to mask an economically significant number of clicks by a publisher (whether generated manually or via a clickbot) would be so great as to make such fraud impractical. IMHO, it's more likely that an unscrupulous advertiser would try to exhaust a competitor's account with fraudulent clicks, simply because the strategy would work in the short run even if Google detected the fraud and gave the victim a credit for invalid clicks later on.
Also, fraud (whether by advertisers or by publishers) is almost certainly more prevalent in some categories than in others. If you're an advertiser who's marketing Vistula river cruises or industrial grommets, fraud is unlikely to be a problem. Why? Because the fast-buck crowd is likely to be targeting obvious "money" keywords or topics that attract a great deal of traffic. (And let's face it: Most petty crooks aren't that bright. They're likely to be familiar with Viagra and home mortgages, but how many of them have even heard of Vistula river cruises or industrial grommets?)
If you're a small business that can subsist on low-hanging fruit, ignoring content ads may be a viable strategy. But, as others have pointed out, relying exclusively on search ads is leaving money on the table, because a majority of users never click on AdWords. Content ads give you a second (and a third, and a fourth, etc.) chance to reach those prospects--including the prospects who are looking for information before they buy.
But I can’t believe many advertisers are clicking on their competitor’s ads to knock them out. What would that get you? A higher position on the list of ads for the remainder of the day? That’s not so valuable. Maybe you’ll get a slightly higher CTR without the competitor’s ad on the page. Aside from being immoral, this requires that the advertiser spend time clicking on the ads, and who has time for that? I’d much rather spend the time looking at site logs for fraudulent clicks to my own sites.
And most of the AdSense sites I’ve looked at in detail have been on the Internet less than a year and consist of 3 or fewer pages. It’s obvious most were created just to benefit from high-priced keywords.
Again, it probably depends on the category, but in my category, such sites get little if any traffic. If I were an advertiser, I'd be more concerned about low-quality traffic from big general-interest partner sites, DomainPark, and gmail. (Mind you, the new variable-discount scheme is supposed to adjust for a site's likelihood of stimulating a "business action," but I imagine the jury's still out on how well the variable-discount scheme works.)
But I can’t believe many advertisers are clicking on their competitor’s ads to knock them out.
Again, it probably depends on the topic and the types of advertisers it attracts.
I’d much rather spend the time looking at site logs for fraudulent clicks to my own sites.
And as a publisher, I'd rather spend my time creating pages that deliver value for readers, advertisers, and my own bottom line. :-)
For what it's worth, I see many of the same advertisers on my editorial content site month after month, and some of them are well-established medium-sized to large businesses (including at least a few giant international corporations). So it's obvious that some advertisers are finding that content ads work well for their products and services. But again, the ROI and lead quality of content ads probably depend a lot on the topic and whether the keyphrases result in accurate targeting by audience. Not too many ads for Vistula river cruises or industrial grommets are likely to show up on a busy weather page, a quickie made-for-AdSense site, or a high-traffic DomainPark page.
What would hurt is if they searched in ways undetectable by Google's fraud detection and NEVER clicked my ads. It would take several hundred a day to potentially hurt me and would be very labor intensive.
Personally, I never click a competitors ad because I don't want to give them the CTR boost.
