Ad fraud takes many forms: bots that generate fake impressions or clicks, click farms that simulate human activity, proxy and data center traffic that hides a visitor's true origin, and domain or placement misrepresentation. The common thread is that the traffic cannot become a real customer.
Left unchecked, invalid traffic inflates your impression and click counts, drains budget and corrupts the data you optimize on – which is why filtering it is essential for any serious campaign.