From the December 2005 issue of Entrepreneur

Online retailers beware: Click fraud--which occurs in pay-per-click online advertising and involves artificially inflating traffic statistics--may be a larger problem than you think.

Most PPC search engines have systems in place that identify click-fraud patterns and don't charge the advertiser for the fraudulent clicks. Google, for example, can generally detect rapid, successive clicking from the same person or IP address. However, individuals involved in click fraud today are using more advanced cloaking technologies that may circumvent these preventive systems.

To find out if these sneakier attacks are being identified, MarketingExperiments.com, an online marketing research laboratory in Atlantic Beach, Florida, conducted an experiment earlier this year in conjunction with Clicks2Customers.com, a search marketing solutions provider. It focused on three Google AdWord campaigns running over a 10-day period in 2005. Duplicate clicks were determined by comparing IP addresses, language, browser settings, referring URL, time of click, OS and other criteria.

"Our random sample of PPC campaigns uncovered as much as 29.5 percent PPC fraud and showed that Google was able to account for only a tiny portion of those fraudulent charges," says Jalali Hartman, senior strategy analyst for MarketingExperiments.com. Hartman says e-tailers can combat click fraud by doing the following:

1. Carefully monitor rapid drops in website conversion with corresponding spikes in paid search traffic. This type of rapid change in metrics could indicate someone or something is manipulating your search campaign.
2. Implement a click-fraud tracking tool. There are several monitoring tools that will look for irregular patterns in your click traffic and flag potential fraud. Some popular ones are AdWatcherfrom MordComm, Click Auditor from Keyword Maxand ClickSentinelfrom Zed Seven Pty Ltd.
3. Report any click fraud to Google so its fraud team can attempt to identify the source of the fraud.
4. Monitor your overall site traffic on a daily basis. By using an accurate web analytics tool, you can monitor the quality of your overall traffic and infer potential problems based on trends. on a daily basis. By using an accurate web analytics tool, you can monitor the quality of your overall traffic and infer potential problems based on trends.
Melissa Campanelli is a marketing and technology writer in New York City.