Click Fraud on the Rise, Study Says

AUSTIN, Texas - A new report from Click Forensics concludes that 17.1 percent of all click-throughs on Web advertising are the result of click fraud, undermining the pay-per-click business model in Internet advertising.

Click fraud occurs when a person or automated program clicks on a web ad to artificially increase the click-through rate.

Click Forensics, which monitors and seeks to prevent Internet crime, said the level of click fraud is at its highest since the company started monitoring the practice in 2006. The first quarter of 2008 was recorded at 16.3 percent and click fraud is clearly on the rise in the past year.

Technology sites such as IT World and TechCrunch report the study found more than 30 percent of click fraud stems from automated bots, which is a 14 percent increase from the previous quarter and the highest rate so far recorded by Click Forensics.

Click Forensics reports on click fraud quarterly via its Click Fraud Index, which compiles data from more than 4,500 online advertisers and agencies that use the ad services of major search engines.

Ads on networks such as Google AdSense and Yahoo! Publisher Network have seen click fraud incidents rise to 28.2 percent from 27.1 percent last quarter.

The study reported that most click fraud that came outside of the U.S. came from Canada, at 7.4 percent, Germany, at 3 percent, and China, at 2.3 percent.

Click Forensics said the increase in click fraud may be linked to the severe economic climate for business worldwide.