Click fraud poses a serious threat to PPC advertisers as well as to the credibility of PPC networks. As of 2008, researchers estimate $1.6 billion were lost to click fraud. It occurs when a competitor clicks on your ads to reduce your budget or when web robots or spiders to click on ads fraudulently.

Google and other PPC networks verify the existence of click frauds. They have not solved the problem as of the moment but are currently working to prevent it. As a PPC user, we can take some steps to protect our campaigns from click fraud while the networks are still finding ways to solve the problem entirely. Below are five measures you can implement in your Google Adwords campaigns:

1. Keep an eye on your click through rates. It is easy to review your click-through rates and conversions with Google. You can even print out a daily or weekly report to monitor any bizarre activity. You might also want to reconcile your click-through rates with your actual web site traffic report. Check for IP addresses and websites that access your site regularly.

2. Set-up a daily budget. Limit your advertising costs on Adwords by setting up a budget. Your budget should be at a reasonable level allowing you to maintain it for several months. If you are a target of click fraud, your losses will only be limited to your specified budget.

3. Impose a daily click limit. Author Bruce C. Brown, of "The Complete Guide to Google Advertising" advises Adwords managers to impose a daily click limit on their ads. When the daily click limit has been reached, your ad is cut off from circulation. Like number two above, this also reduce the risk of click fraud while allowing you to monitor the number of clicks generated by your ad in a given period.

4. Limit your Ads to certain locations. Using the geographic location feature is one of the best methods for safeguarding your campaigns against fraudulent activities. Research where your target market is mostly based and focus on running your ads only in certain countries or regions. It would be a waste of money to run ads on regions you won't do business in.

5. Don't sign up with PPC programs that offer something for free. There are several PPC companies that offer free products, services of downloadable tools as an incentive for you to sign up. Be cautious about these, especially if it involves downloading something to your computer that 'monitors' your keyword campaign. However, getting a Google Adwords 'credit' when you sign up with a hosting company or domain name registrar is safe; as long as you're working directly with Google Adwords, you don't have to worry about fraudulent activities that would affect your budget.

Google employs its own fraud protection team to investigate click fraud cases. Report your case to Google immediately if you think you've fallen prey to click fraud.

Advertising with Google Adwords is a powerful technique that most websites can use to find more customers. Creating quality Google Ads is one of the best skills to have when using Adwords - and there are several good training guides available online.