Imagine Google sending you a $100,000 AdWords bill, when you only planned to spend $500 on your pay-per-click advertising campaign? Or what if your website was pulling nice click-through profits thanks to Yahoo! PPC ads, but the system suddenly shut you out, claiming you were the person doing all that clicking just to increase your income?

Frequently seen in the pay-per-click advertising world, click fraud is a deceptive technique that's costing companies and entrepreneurs thousands. In most cases, click fraud involves malicious, massive clicking of your PPC ad by a competitor in the hope that you'll panic when you see your sky-high advertising bill and stop running PPC ads. Once you can no longer afford to advertise, the "disappearance" of your ads from Google or Yahoo! means more clicks--and more sales--for the perpetrator's products or services.

You can't completely eliminate the risk of click fraud. You can, however, diminish the likelihood that it will devastate your advertising budget. According to subject matter experts at Clicktracks, there are various techniques you can employ to reduce the risk of being a click fraud victim:

1. Set different bid prices for content-targeted sites
Reduce your financial risk by limiting the amount you are prepared to pay per click. Limit your exposure by limiting your placement of ads on "just any" website relevant to your keywords.

2. Keep an eye on your competitors
Monitor who is competing with your keywords in the search engines, as they could be a potential source of competitor click fraud. ClickForensics offers free click tracking reports that details the number of clicks on your ads that come from competitors and other common sources of fraud. Companies such as AdWatcher and ClickDefense offer free trials. You can search on SourceForge for open source PPC fraud detection as well.

3. Always track your advertising campaigns
You can't manage what you don't monitor. Google makes available to advertisers using its AdWords program two tools: Campaign Performance and Account Performance. These allow you to see the number and percentage of clicks that Google has categorized as invalid.

4. Only advertise in specific countries
Countries with low labor rates employ people for the sole purpose of clicking on advertisements. Don't run ads in countries where you can be seen and possibly sabotaged.

5. Target high-value sites for your ads
Some low-quality sites are hotbeds of click fraud. A person or a bot may be clicking your ad--any ad--on these sites to boost the owner's PPC revenues. Google and Yahoo! allow you to set up ad campaigns that only run ads on the sites you specify, thereby avoiding sites where unethical revenue generating may occur.

6. Purchase software programs that generate special referral reports
ClickTracks and Clicks2Customers are two top services that offer search reports that'll help you identify any content-targeted websites that are sending suspicious amounts of visitors to your site. ClickTracks also helps you prepare a fraud report should you ever need to prove your case to a search engine firm.

PPC advertising is a very important a component of your marketing mix. If you understand the market and follow these tips, it's less likely that click fraud will happen to you.

Jon Rognerud is Entrepreneur.com's SEO columnist, an SEO consultant and the author of The Ultimate Guide to Search Engine Optimization, available from Entrepreneur Press. He has more than 20 years experience building marketing and web projects, including creating content and application solutions at Yahoo!/Overture.