Google Adsense and other similar advertising programmes earn their money from advertisers who are willing to pay for each user who clicks on one of their displayed advertisements and visits their site accordingly. Site owners hosting these ‘pay per click’ advertisements get paid a share of this revenue.
Some dishonest sites are not earning enough traffic to make the money they would like from legitimate clicks on the ads they are running. Instead of looking to legitimately build their business and grow their traffic they look for ways to fake legitimate clicks and earn money they are not entitled to. Unsophisticated (and easily caught) fraudsters might simply click on ads showing on their site themselves. Others may encourage friends, family or even paid agents overseas to do this for them.
Click fraud is a serious problem for the online advertising industry especially for webmasters who rely on paid advertising in this form to fund their legitimate businesses, not to mention advertisers who would like to expand their online presence using tools such as Adsense. As a result providers such as Google invest millions in sophisticated anti-fraud techniques to detect unusual patters and shut down offenders.
Related Reading: Adsense