Who perpetrates the click fraud? A significant portion is performed by the competitors who aim to drive up the advertisement cost of their rivals, and hence drain their rivals' marketing budget. This is a form of digital industrial sabotage. There are the profiteers using ad-sense fraud (see Google AdSense Fraud Article about these shoplifters ) then there's the impression fraud guys ( Article on Impression Fraud) who are the sneakiest. There's always the existence of the terminated employee getting his revenge by clicking on the Pay Per Click ( PPC ) advertisement. The one that's probably the hardest to nail down is the equivalent of a drive by clicker. Someone who enjoys random acts of click violence and other such mayhem. Anecdotally, a person who wanted to click on PPC ads of all the lawyers, just because he “hates” lawyers. There was a method to his madness, since the PPC keywords that lawyers bid for, go for as much as $50!

To gauge the seriousness of the problem, who better to listen to than Google's chief financial officer, George Reyes. Click fraud is "the biggest threat to the Internet economy,” Reyes said during a December investors conference. "Something has to be done about this really, really quickly, because potentially it threatens our business model." Ask Jeeves, similarly thinks of it as a serious enough risk to list it in it's regulatory filings. They feel that their revenue might decline "if advertisers come to perceive click-fraud as a widespread and pervasive problem."

We have to agree with them. The advertiser pays a large premium for having focused, directed traffic to his website through the paid listing. If banks lose their credibility, then people will stop using them and hide their dollars in their mattresses. If the search engines lose their credibility due to click fraud, their customers will vote with their dollars and move back to more traditional forms of advertisement. Similarly, as the PPC customers see their advertising ROI drop, often due to such fraudulent activities they may start walking towards the exits.

One would have thought that given such a threat to their business model, the big search engines would have been more forthcoming with information pertaining to data regarding the visitor to a site through PPC and incidence of click fraud. Such is not the case. The big two, Google and Overture are extremely secretive, and seldom give out any traffic information, or details about how they track click fraud. Their approach is not without justification, given the possibility of people reverse engineering their tracking mechanisms and allowing the fraudsters to tweak their tactics.

The search engines are also accused of turning a blind eye to click fraud. The reasoning goes that they are likely to take a severe hit to their earnings if all the click fraud cases are detected. They have not been following up on anything but the most egregious instances of click fraud. We are inclined to believe that the search engines make some effort to play fair, but they are hobbled by some technological limitations to their ability to track click fraud.

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