Lets say I have set my budget at $50 per day on adwords. This would normally be enough for 1 day. Could a competitor blow my budget by clicking the ads? If Google recognised their repeat clicks could they be using another system to crash my budget quickly every day?
Google has sophisticated click fraud systems in place. The chances of someone being able to do this is very slim. Even getting many friends to "do this search and click this ad" would not work because you'd notice extremely high click rates. I personally never encountered this and not something I worry much about.
We use it for a very few limited keywords now as we saw a sunden increase in CTR over a short period. I guess i just do not trust people.
You can setup Google Analytics for your site and link it to your Adwords account. It gives you data like where did the click come from (like countries, cities), the position of your ad in search result when receiving the click, number of page views generated by the click, network provider of the user, browser, OS etc. If you see all clicks are from same type of browser, OS, network provider and city. Then chances are, those clicks could possibly be invalid. (just maybe) Cheers, Felix
Now Google has update montly charging for advertisers, it means that you will never pay more than the budget you set such as $50/day and $1500 per month. Moreover, Google has very strong softwares and algorithms to help advertisers from clicking your ads. You do not need to worry about that