Pay per click search engine advertising is one of the most popular ways to promote a website. With Overture and Google leading the pack, the industry as a whole has grown immensely in the past few years. According to a report by PriceWaterHouseCoopers, they estimate that Internet Advertising brought in more than $9 billion in 2004 alone.

With PPC advertising you choose "keywords/phrases," then bid how much you'd like to pay for each click. When a searcher goes to a search engine and types in one of your keyphrases, your short text ad appears, and if they click on it your account is then charged. In a "perfect world" this is the way it would work, but thanks to unscrupulous people, there's a dirty little secret known as "click fraud."

Click fraud is simply the act of clicking on ads for the direct purpose of costing the advertiser money. It's similar to paying out cash for false leads. According to InternetWeek.com, 60% of those who responded to a survey conducted by the "Search Engine Professional Organization" had stated that fraud is a problem when it comes to PPC advertising.

So where does click fraud come from? Well, there are actually a few different sources:

1) AdSense Users: Google Adsense has a program called "Adsense" that pays website owners to run their Adwords ads and compensates them per click. Google does monitor this and it's against their terms of service to click on any of the ads on your own site. If they find a publishers doing this, they will lose their accounts, but some may still be clicking under the radar.

2) Your Competitors: Your competitors could be clicking on your ads over a period of several days in order to deplete your ad budget.

3) Software: There are those who use automated clicking tools, such as robot programs, to click on PPC listings.

In some Asian countries, people are often paid to click on PPC ads for hours. Many don't know why they do it, and don't care, only that they'll be well rewarded for their efforts. If you do a search on any search engine you'll see plenty of sites looking to hire people for just this purpose. For more on this see...http://tinyurl.com/2ka5g

Most PPC networks have measures in place to protect you against click fraud. Overture tracks more than 50 data points, including IP addresses, browser info, users' session info and what they call "pattern recognition." They have a "proprietary system" in place for detecting fraud and a specialized team that monitors things and works with the advertisers to stop it.

Google offers suggestions to avoid click thru fraud, such as "using negative keywords" to keep your ads from showing up for products and services that are unrelated. They also suggest adding tracking url's to your links so you can track the traffic coming from Google. An easy way to do this is to add a ? to your links along with the identifier. For example, a tracking link to identify Google would look like this:

http://www.yourdomain.com/?referer-google

If you go through your log files, you'll be able to see your Google traffic at a glance.

If you suspect fraud, Google asks that you contact them right away, as they have a team of researchers that will investigate. They also take action to block future impressions from anyone they identify as committing click fraud. Like Overture, they also have "proprietary technology" that distinguishes between normal clicks and invalid ones. Google never bills you for any "bad clicks" that are caught by their system.

So what's an honest website owner to do? You need to be alert to any "suspicious activity" by researching your server logs or stats. If you're experiencing a lot of clicks and no sales you'll also want to take a closer look. You need to watch for any spikes in traffic, usually on one keyword or phrase and coming from only one PPC source. You need to measure and track all of your PPC accounts closely.

If this sounds like too much work, you may want to look at an outside service to take care of it for you. A variety of new services have opened recently to help combat the click fraud problem.

1) Keyword Max: http://www.KeyWordMax.com

Offers up a service called "Click Auditor," which monitors the activity on your PPC accounts and alerts you to any suspicious activity. You can request a free demo at the site.

2) Click Detective: http://ClickDetective.net

A website monitoring service that uses sophisticated tracking mechanisms to determine whether "visitor behavior" is normal or not. Offering a 15 day free trial. Easy to use, you just copy and paste a snippet of code on your page and add a campaign ID by logging into your account.

3) Click Assurance: http://ClickAssurance.com

An Internet Security Firm that specializes in click fraud. They will audit your PPC accounts and go after any refunds you are due because of fraud.

4) Who's Clicking Who: http://WhosClickingWho.com

An independent auditing service that tracks individual users for fraud. Can also detect abuse coming from proxy servers. A one month subscription is $79.00, which includes free installation and up to 50,000 transactions per month.

5) ClickLab: http://ClickLab.com/products/click-fraud

This service isolates bad clicks with a scorecard based detection system. Pricing starts at $50.00 per month and is based on the number of sites you need to track and their page views.

ClickLab also has a nice white paper you should download while visiting: "How to Defend Your Website Against Click Fraud."

Click fraud isn't going away anytime soon. If anything, it will probably get worse before it get's any better. It's up to you as a vigilant website owner to do what you can to keep your PPC advertising costs down. You can't stop it, but with the right tracking in place, it can be managed and controlled, and hopefully kept to a minimum.