According to figures from US-based firm ClickForensics, click fraud is continuing to rise, reaching 14.2% in the last quarter of 2006, the highest level all year.

Q4 numbers from the Click Fraud Index suggest that the overall industry average click fraud rate was 14.2%, compared with 13.8% for the third quarter, 14.1% for the second and 13.7% for the first.

Other findings included:

  • The average click fraud rate of PPC ads appearing on search engine content networks was 19.2% for Q4.
  • The industry average click fraud rate for high-priced search terms remained at 20.9%. High-priced terms are defined as terms that cost over $2.00.
  • The average PPC term cost for the top key terms across the five biggest search advertising industries – Retail, Financial Services, Health & Fitness, Technology, and Entertainment – for Q4 was $3.50.

ClickForensics’ report used data from 3,000 online advertisers and agencies working for a range of companies.

However, Google isn’t impressed with such third party estimates of click fraud rates, claiming that the actual click fraud rate on Google is lower than 2%.

Shuman Ghosemajumder, Google’s business product manager for Trust & Safety, who had previously made the claim that click fraud rates were less than 2%, responds to the ClickForensics report on his blog.

He points out problems in their methodology:

“We found serious flaws in their counting of clicks – a more fundamental issue than their counting of click fraud. They were making basic counting mistakes and inflating the number of clicks by an average of 40%.”

“The source of this problem is incorrectly counting page views – from users browsing through an advertiser’s site – as clicks.”

Another press release, released yesterday by IncreMental Advantage, claims that click fraud cost internet advertisers $666 Million in 2006, though at first glance the figure seems a little too contrived to be entirely accurate…