Today we announced the pay-per-click (PPC) fraud figures for Q2 2009.  The data comes from the Click Fraud Index.  Traffic across more than 300 ad networks is also reflected in the data.

Key findings from data reported for Q2 2009 include:

-    The overall industry average click fraud rate was 12.7%. That’s down from 13.8% for Q1 2009 and from the 16.2% rate reported for Q2 2008.
-    Click fraud traffic from sophisticated sources and scripted programs rose again in Q2 2009. This included a rise in the incidents of publisher collusion fraud on ad networks.

The data in Q2 also showed that many of the new click fraud schemes identified last quarter continue to increase in number and sophistication. Publisher collusion fraud was one example. This scheme occurs when online publishers use rotating IP-addresses or botnets to click ads on their own sites in order to generate inflated commissions from unprotected ad networks. Ad networks have difficultly differentiating such attacks from valid clicks.

Today we announced the Q4 2008 Click Fraud Index numbers (Industry Click Fraud Rate Higher Than Ever).  Click fraud traffic from botnets grew to 31.4 percent.  This seems to be just one byproduct of the economic downturn and increase in cybercrime (State of Internet Security).

Key findings from data reported for Q4 2008 include:

• The overall industry average click fraud rate grew to 17.1 percent for Q4 2008. That’s up from 16.0 percent in Q3 2008 and from the 16.6 percent rate reported for Q4 2007.
• The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 28.2 percent. That’s up from the 27.1 percent rate reported for Q3 2008 and down slightly from the 28.3 percent rate reported for Q4 2007.
• Traffic from botnets was responsible for 31.4 percent of all click fraud traffic in Q4 2008. That’s up from the 27.6 percent rate reported for Q3 2008 and the 22.0 percent rate reported for Q4 2007.
• In Q4 2008, the greatest percentage of click fraud originating from countries outside the U.S. came from Canada (7.4 percent), Germany (3.0 percent) and China (2.3 percent).

The three biggest red flags that point to the economy having an impact on the growth of click fraud are:

• The Q4 click fraud rate jumped a percentage point when it was steady most of the year.
• We saw a higher than usual jump in the botnet rate (14 percent this quarter) and the botnet rate rose to its highest level ever at over 30 percent.
• We noticed a re-emergence of click farms when they had all but disappeared.

In over four years of reporting the Click Fraud Index, the overall industry click fraud average is at its highest threat yet.  With click farms and botnets on the rise, advertising campaigns are taking the hit.  It seems that the online advertising industry is feeling the pressure of the inconsistent economy in more ways than one.