AdWords click manipulation could be taking money from your pocket.  This type of AdWords fraud is advanced, sophisticated and quite mature.  Learn what it is and what you can do about it.

Here is a wonderful description of how software exists that can click your ads and behave like a human visitor. The idea is that your competitor could use such techniques to exhaust your AdWords budget.

"(Click manipulation) technology was well developed before Google even existed. People were using it to manipulate click-through rates for banner ads, Web polls, hit counters, and other click counting services as far back as 1996."

"The more sophisticated operations use networks of servers scattered across multiple NOCs, employing software that spoofs user agents, identifies itself with multiple IP addresses across a wide variety of C-Blocks, and randomizing routines that are intended to simulate users clicking through links and spending anywhere from 3 seconds to several minutes on the pages."

"The technology was employed on the commercial side for the intentional manipulation of DirectHit results, Goto.com paid ads, affiliate programs (such as those operated by Amazon, Commission Junction, ClickBank, etc.) and large banner networks."

"Anything where someone felt they could gain an advantage, make some money, or deprive a competitive of an advantage or the ability to earn money has been targeted by click manipulators."

First, I have no doubt such software exists. But it seems that only the extreme case would become a target for such manipulation. The high level of sophisticated attack would only be worthwhile in a highly competitive and lucrative market.

Attacking mid-sized to small markets doesn't seem worth the effort. Perhaps a business model where someone attempted to sell the click manipulation technology might make it profitable. But simultaneously you can't advertise that you employ or sell such technology.

Second, click manipulation would increase your ad group or keyword CTR. A better CTR means a better quality score. A better quality score means you could lower your CPC bid. So while the prospect of exhausting competitors Adwords budget may be appealing, the knowledge that you are improving their quality score and lowering the CPC certainly offsets it.

Make sure you set a daily budget just in case.