Internet Marketers are losing a lot of money to click fraud every day, every week, every month, every year. But what can be done about it? Is there any real hope of combating this assault on the internet marketing inductry?

CRM Today: Marketers are at risk of soon losing over $1 billion annually through Internet “click fraud,” according to SPSS, a worldwide provider of predictive analytics software. In December 2004, the Search Engine Marketing Professional Organization (SEMPO) found that one in five pay-per-click online advertisements are counterfeit. It is estimated that last year, click fraud cost businesses $800 million. If no action is taken, these costs are set to rise to $1.1 billion.

$1 billion is a lot of money to your average internet marketer or home based business person. Obviously each of us only realizes a small portion of the over all total, but it is an indication that there is rampant unchecked fraud taking place. How do you know how much of any campaign may be lost to click fraud? How do you plan for it? recoup from it?

There is no real way for an individual marketer to know what portion of their pay per click advertising is lost to click fraud, but with these numbers it is clear that some is lost. There is the obvious loss of funds to these fradulent click schemes, many of which are a result of “paid to click” opperations run by former “paid to read” opperators whos revenues dried up when internet marketers realized there was mor advertising value in PPC than in PTR.

But beyond that you have to realize that your metrics are off too. without knowing how many clicks to a given campaign are fraudulent, it is not possible to measure performance of the campaign accurately against ofther forms of advertising and marketing activities that are not subject to this fraud.

MarketingExperiments.com: Topic: Click Fraud — Our research indicates that as much as 30% of paid search traffic may be fraudulent.

What You Need To UNDERSTAND: Of those who recognize that click fraud may be a significant problem (70%) only 25% of all advertisers have tracked click fraud.

A search at Marketing Experiments turns up 24 seperate reports in which click fraud is addressed. If you are running PPC ad campaigns I highly recommend paying them a visit and looking over some of these reports.

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Dane Morgan wrote this around lunchtime: