Full Text: http://www.searchengineguide.com/mordkovich/003558.html

Some Snippets:

"Depending on how much you spend on PPC advertising, you may or may not feel the results of click fraud. In some competitive industries, clicks reach a cost of $5 and more. "

"One of the main problems is that Google and other search engines offer revenue-sharing programs, such as AdSense, for publishers who are willing to put Google content ads on their websites. Monitoring thousands and thousands of publishers can be a daunting task, and you can bet that, human nature being what it is, some website owners click on their ads every now and then to boost their revenue. "

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What are you doing to help battle click fraud where your own sites or campaigns are concerned? Are you hiring anyone to monitor your clicks? Have you had trouble with competitors and fraud in the past?

We've been investigating click fraud for the past couple of years using various tools, both commercial and home-grown. I also help the programmers who put together most of the currently available commercial services.

Typically the commercial services need you to put extra code into the target URIs of all of your PPC ads, and then add some code to your pages. Some don't require the modified target URI. All of the services we've investigated use a Javascript and/or cookie-based tracking mechanism in order to gather the data they will use to identify fraudulent click patterns. As a result, they are less than reliable, as any self-respecting fraudster will have cookies and Javascript disabled, rendering the tracking mechanism useless.

Our best analyses have come from our home-grown programs that involve extensive log analysis and filtering.

I've got to say that while I'm certain click fraud activities are on the rise given the increase in Google AdSense publishers and other PPC affiliate programs being offered by the search engines, and given the increasing costs-per-click in some competitive areas, we believe that Google and Overture are doing an excellent job of filtering fraudulent clicks and keeping the cost of those clicks out of our invoices.

I have worked closely with the developers to hone most of the commercial click fraud analysis programs out there, and they frequently mention various statistics including one popular estimate that most PPC advertisers suffer from a click fraud rate of around 30%. We have found that in all cases, the commercial analysis services provided data that was very difficult to understand, even for pros like us, and did not clearly illustrate the service's conclusions about various fraud rate values.

We just haven't seen it in our log files. We estimate that our NET click fraud rate is in the range of 1%-4% each month when the commercial services' results indicated somewhere in the range of 25%-70% (yep ... one vendor said 70% of our PPC clicks were fraudulent!) This is in a field that commands $50 per click and higher for the top terms.

We are keeping an eye on it, but we simply do not see that great of an impact as GGL and OVT are succeeding in keeping them off our bill.

I am definitely interested in hearing others' analyses, particularly from those who are doing their own.

If you are using one of the (few) commercial analysis programs, how are they working for you? Can you understand what their data is telling you? Does it correlate with what your log files tell you?