CNET: Exposing click fraud

While no one seems to be able to put their finger on just how many of the clicks coming in from cost-per-click media are faked, experts in the field consistently peg the range between five and 20 percent. Some sites create automated bots to increase the clicks on their media. Others hire people in countries with low labor costs to click on ads. Some companies even click on the ads of their competitors to deplete their marketing budgets and give them erroneous media efficiency information.

Both Google and Overture use fraud squads to root out bad clicks, using proprietary tracking technologies, sales-to-click ratios and just plain old gumshoeing to cut off sites that seem to be exploiting the inherent CPC weakness.

Related Story: Foreign Fraudsters Mobilize Armies of Clickers for PPC