Click fraud, bollocks or not?

On the surface the odd bit of click fraud would not seem to hurt anyone much. After all what is the odd few cents for a bogus click to a big company (bit like nicking a pencil from the office, or making a personal phone call when the boss is out)

No, its more than that, big money is involved, A New York Times article points out

Google, the most popular search engine, said in February it collected $1 billion in revenue during the last three months of 2004, both from ads that appeared alongside Google results when people searched for specific keywords and from ads it placed on other companies' Web sites based on the context.

Yup, that's $1 billion from those little clicks to big G alone in only 3 months. Add to that the PPC income generated by the other players in the market. We are talking serious money here. A few years back it was simple, you set up a PPC campaign, and you paid the SE for the results. Today you need to consider employing a specialist click fraud consultant

Several years ago, nearly all the money spent on keyword advertising flowed directly from marketers to search companies. Now, half of that spending passes through a new cottage industry of middlemen, agencies that specialize in search engine marketing and click fraud detection, according to a report from JupiterResearch, which conducts business and technology market research.

A Clickz report goes into some of the figures that are touted for the extent of the problem

It is on these affiliate sites that 70 percent of click fraud activity takes place, according to Scott Boyenger, president and CEO of ClickDefense, one of a score of companies that has launched in the last 18 months to identify and stop click fraud. Affiliate publishers distribute pay-per-click ads and search players pay them a cut of what advertisers bid.

"About 15 to 20 percent of all click activity is erroneous. Seventy percent of that is not by real people," Boyenger said, referring to bots designed by fraudsters to click on PPC ads. "The advertiser is the loser and the companies offering PPC are winning, and so are the affiliates

So the problem appears to be more prevelant, and there is some agreement among the experts that the percentage of click fraud is higher on so-called tier two services like Kanoodle, Enhance Interactive, and FindWhat.com than on Google and Overture.

Overture says it employs three lines of defense against click fraud. First, every click must pass through a system of thousands of filters designed to screen out "unqualified" clicks of all kinds. Second, Overture employs a team of expert analysts whose job it is to screen out invalid clicks from genuine click traffic. Finally, Overture actively solicits input from its advertisers, forming what it refers to as a "neighborhood watch" helping to report suspicious activity, Slade said

So how big is the problem, seems nobody knows, or that those who do know are not wanting to say A CNN article reports

Estimates vary widely on how much click fraud is going on in the $3.8 billion search engine advertising market.

"Click fraud exists, but it's mostly a big paranoia," said Chris Churchill, chief executive of Fathom Online, a San Francisco firm that studies the spending patterns on search engine ads.

Others believe anywhere from 10 percent to 20 percent of the clicks are made under false pretenses.

You pays your money and you takes your choice apparently.