The Economist on Click Fraud

The 11.25 - 12.1 edition of The Economist has a brief piece on click fraud. Here is a summary:

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  Internet advertising is a $27 billion business today and it should be $61 billion by 2010. In 2001, it was just $9 billion.
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  Click fraud comes up from two areas. First, advertising affiliates (read: the Google content network) create bogus clicks. Second, competitors click on your ads to exhaust your budget.
  
• What percentages of clicks are fraudulent? 10-50%, with an emphasis on the 10% range.
  
• Google and Yahoo are now taking the problem more seriously and both expect to have an independent auditing system by the middle of next year.
  
• One alternative to pay per click is pay per action. The advertiser only pays on conversion. This idea doesn’t have a lot of traction yet and, in fact, may be a non starter since it would link search engine compensation to factors outside of their control.