Not to be outdone by research firm Outsell, which grabbed tons of coverage with its recent click fraud report, Click Forensics (creators of the Click Fraud Index) released its own numbers, indicating click fraud growth from 13.7% on average three months ago to 14.1% today. The Outsell report cited an average of 14.6% clicks that were bogus.
As click fraud grabs more headlines the question is, will this growing perception and concern over click fraud “kill the golden goose?” No. But it may prompt some advertisers to try lead generation, PPCall and CPA models in addition to paid search (if they aren’t already). It may also prompt some advertisers to back away from contextual networks and stick to paid-search, where click fraud may be somewhat less. It may also hurt second and third tier paid-search networks where click fraud is perceived to be much worse than on Google and Yahoo!.
Here’s more from AP:
Google and Yahoo are better at weeding out click fraud than smaller Web sites, but Click Forensics still concluded both companies are being hard hit. About 12.8 percent of the clicks on ads served up by Google and Yahoo are deceptive, up from 12.1 percent three months ago.
The central reason that advertisers can’t afford to abandon paid-search is that consumer usage of search is just too compelling for them to back away now. Indeed the old Pacific Bell yellow pages marketing slogan “If it’s not in the book maybe it doesn’t exist” applies to Google. In fact, that’s what Kinderstart alleged in its bid to have Google branded a monopoly in its now failed antitrust lawsuit against the company.
Here are my posts over the past few months on click fraud (those that I remembered to tag).
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Here’s Google’s official response to Donna Bogatin’s original post quoting Eric Schmidt re his seemingly lax attitude toward click fraud.
Screenwerk 
July 19, 2006 at 2:20 pm
As more and more companies enter the online advertising world, the temptation for click fraud will only increase as competition rises. A tool that might be handy for advertisers is to allow an advertiser to submit a list of competitor IP addresses that would prohibit a click from IP’s within a range. Forward-thinking companies who wish to be seen as reputable could also enter their competitors on a list, which would disallow their own IP’s to click on their competitors ads. This might deter people within the organization from the “sick click”. Although we know there would be many ways around this band-aid proposed, at least it’s a start.
As you mentioned, there will also be a continuous move towards pay-per-lead models, where one can more accurately validate the substance of the person on the other end. It becomes the duty (and competitive advantage) of the referring party to set up systems to ensure, within reason, the lead being sent. Bad leads equal unhappy customers, so in order to keep it’s customers, the referring site must continually improve. The results are easy to track and provides true transparency into acquisition costs. While fraud can be found in pay-per-lead models, it is more difficult due to the time involved and information sought.
Because of this, vertical-hybrid sites that have deep, relevant, vertical content and solutions combined with innovative lead generation tools will provide a viable solution for both consumers and the local merchant. The customer receives personalized content at a micro-requirement level, and the merchant receives a qualified lead that gives them tools necessary to close a sale.