Click fraud a huge problem

The San Francisco Chronicle reports:

nternet advertisers paid $800 million for bogus clicks on their marketing messages last year, shaking confidence in the industry and prompting many to reduce spending with Google, Yahoo and other Web sites, according to a study to be released today.

The survey, by Outsell Inc., a market researcher in Burlingame, is one of the most detailed looks at the nagging, high-profile problem known as click fraud. Advertisers have long complained that major Internet sites don't do enough to combat the practice or, at least, disclose the extent of it.

Internet advertisers pay companies like Google and Yahoo every time someone clicks on their ads. The advertisers also share revenue with Internet companies based on how many advertising clicks their Web sites generate. Click fraud occurs when scammers repeatedly click on ads to cause a rival company to be overcharged. In another incarnation, fraudsters place the ads on their own Web sites and then click on the links to get a piece of the shared revenue they've agreed to with Google or Yahoo.

In today's report, advertisers say that 14.6 percent of all clicks are bogus. Moreover, three-quarters of advertisers said they had been victims at least once.

A good one to read.