Click fraud has become a major problem for online marketers. If you participate on Google adwords campaigns or Overture, you must already pay a lot for your campaigns.

What is click fraud?

Click fraud is the deliberate clicks to PPC search engine ads for completely other reasons than expressing interest for buying the related products or services.
Overture defines click fraud as clicks arising for reasons other than the good-faith intention of an Internet user to visit a web site to purchase goods or services or to obtain information.
Google defines click fraud, or invalid clicks, as any method used to artificially and/or maliciously generate clicks or page impressions.
In simple words, Click fraud means that someone is cheating you and that you pay too much for your pay per click campaigns.

Who is doing that?

Three main groups click on pay per click ads, without real interest in the offered goods:
People who joined Google AdSense or other per click affiliate programs click on the ads on their own web site to make a little income. Often, these people cooperate with other webmasters to click on each other`s ads.
Some unethical companies click on the pay per click ads of competitors to drive up their advertising costs.
Companies (often in India, Russia and China) hire people who are paid to click on ads.
Google and other search networks provide refunds to advertisers when click fraud has been discovered.
Google and Overture employ `fraud squads,` or teams of people dedicated to fighting click schemes. But at least two marketing executives say such countermeasures are missing fraudulent clicks that are responsible for between 5 percent and 20 percent of advertising fees paid to all search networks.
This is a huge problem. There is no “pay per click” Company denying that click fraud exists. Web analytics companies estimates that the 50% of all click activity is fraudulent.
This means that your pay per click marketing activities are half effective as they could be because of click fraud.
Overture spokeswoman Jennifer Stephens refutes that estimate, saying that the numbers likely represent acts of fraud that are ultimately caught. She added that Overture filters most fraudulent clicks with the best antifraud system in the industry, which combines technology and human analysis.
Most advertisers are aware of the click-fraud issue but have not delved into it because of the technical complexities involved. Others are concerned that they could jeopardize their relationships with the powerful search networks if they complain too loudly.
One of the best ways to eliminate click fraud is using anti click fraud services such as ppctrax (www.ppctrax.com). They provide services like the below:
IP address capture.
IP address geographic Location.
User Agent (browser, bot etc.)
See exactly what keywords are generating your clicks
Date and Time stamp
System detects sudden click spikes from one or more IP addresses
Real-time email alerts at 80% and 100% of your account`s transaction utilization
IP address history - alert you to prior offenders
Another similar service is “who is clicking who”:
http://www.whosclickingwho.com
Other ways is the click fraud capture software like Click Auditor:
http://www.keywordmax.com/click_auditor.html