Last updated: 2 July 2025
Click fraud and click arbitrage are costing advertisers over $100 billion annually — and while one is illegal and the other is not, both follow nearly identical playbooks. In this article, we’ll explain what each scheme involves, walk through a typical step-by-step process, and highlight why, from an advertiser’s perspective, there’s little difference between the two.
What is click fraud?
Click fraud is a cyber-crime in which scammers pose as legitimate publishers and repeatedly click on ads displayed on their own websites to defraud advertisers.
Here’s how it works: An advertiser, like Chanel, creates an ad and agrees to pay an ad network — such as Bing Ads — a set amount for each click. Publisher websites display the ad, and every time someone clicks it, the advertiser is charged (e.g. $30 per click), with the ad network sharing that revenue with the publisher.
Criminals exploit this system by building scam websites, enrolling in publisher programs, and using bots or other deceptive tactics to generate large volumes of fake clicks. These fake interactions don’t lead to real customers or sales — just inflated ad spend. The result: scammers earn millions of dollars per site, while advertisers suffer heavy losses.
Want to learn more? See our article: What is click fraud?.
What is click arbitrage?
Click arbitrage is a tactic where publishers use clickbait ads to attract large numbers of unsuspecting visitors to their websites, hoping some of them will click on high-paying ads placed on the page.
The overall process closely mirrors click fraud — but with one key difference: click arbitrage is legal. In fact, many ad networks actively enable or encourage it, despite the minimal value it provides to advertisers.
To better understand how click arbitrage compares to click fraud, let’s break down the typical steps both schemes follow.
What are the steps involved in a typical click fraud or click arbitrate process?
Click arbitrage and click fraud follow different operational paths — but both lead to useless, low-value clicks for advertisers. Below, we break down each scheme separately to show how they work.
Click Arbitrage
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The publisher builds a search-style website.
The site includes a search box and displays results based on user queries — for example, “luxury handbags.” -
The publisher joins an ad network.
They open a publisher account (e.g. with Bing Ads, Google Ads, or another ad network), which lets them display search ads. A visitor who searches “luxury handbags” might see an ad for Chanel. If they click, Chanel pays the ad network (e.g. $30), and the publisher gets a cut. -
The publisher targets high-value search terms.
They research keywords like “New York class action lawsuit,” which can trigger ads paying hundreds of dollars per click. -
The arbitrager creates a clickbait ad.
These ads — such as “One weird trick…” — are deliberately vague or sensational to attract naive clicks from low-cost sources. -
The clickbait ad runs on platforms like Bing Ads, Meta Ads, or Taboola.
The goal is to drive traffic cheaply — for example, $0.20 per visitor. -
Visitors are redirected to high-value search results.
Even if the visitor isn’t interested in the topic, they land on a page filled with expensive ads. The arbitrager hopes a few will click.
Click Fraud
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The scammer builds a website and enrolls in an ad network.
Like legitimate publishers, they show ads on their site — but their goal is deception, not content or user value. -
They generate fake traffic using bots.
Rather than relying on real visitors, they deploy automated bots to repeatedly visit their site and click on ads. -
They simulate real engagement.
The bots will move the mouse, scroll the page, and occasionally submit fake leads and add items to shopping carts. This mimics human behavior to avoid detection. -
They profit from fake clicks.
Since the cost of running bots is cheap, the fraudster turns a profit — all at the advertiser’s expense.
The difference?
Click fraud guarantees a profit by using bots to control the number of fake clicks, while click arbitrage typically relies on hope — although Polygraph has found many arbitragers also mix in bots to ensure they break even or better.
But from the advertiser’s perspective, both lead to useless traffic — and both drain ad budgets. The main distinction lies in how ad networks and the law treat them: click fraud is illegal, click arbitrage isn’t.
How do click fraudsters and arbitragers make a profit?
Let’s break it down with a simple example.
Suppose it costs a publisher $4 to attract 10 visitors through a cheap clickbait ad. If just one out of those 10 visitors clicks on a high-value ad — say one that pays $20 — the publisher earns $20 while spending only $4, locking in a solid profit.
Click fraudsters make this math work because they control the bots — and can decide exactly how many fake clicks occur, guaranteeing a profit as long as the ad payouts exceed the costs.
Click arbitragers follow the same basic math — but without the guarantee. They can’t force clicks, so their profits depend on how many naive users voluntarily click ads after arriving via misleading headlines. As long as enough people click, the arbitrager makes money.
In summary
Click fraud and click arbitrage are both damaging schemes that cost advertisers billions of dollars every year. While they follow nearly identical processes, the difference lies in how the ad clicks are generated: click fraud involves deception and forced clicks, while click arbitrage relies on low-quality, voluntary clicks from unsuspecting users.
Click fraud is illegal and occasionally prosecuted. Click arbitrage, though equally harmful to advertisers, is legal — and often encouraged by ad networks because it boosts revenue.
Polygraph specializes in detecting and stopping both forms of click abuse to help protect your ad budget.