The recent report by Click Forensics has been refuted by Google (GOOG) as pretty completely flawed based upon "making basic counting mistakes and inflating the number of clicks by an average of 40%. The source of this problem is incorrectly counting page views - from users browsing through an advertiser's site - as clicks," as Google's Shuman Ghosemajumder says.
It is a serious issue when the company claims huge numbers like 14.2 percent of clicks being fraudulent during the last quarter of 2006. Google says that in truth the bad clickes are only a small fraction of a percent.
Part of the problem according to Ghosemajumder, is "basic mistakes being made by firms selling 'additional protection' to AdWords advertisers - in essence, charging them money for advice which can actually hurt their businesses.
"This over-counting problem results in an even more dramatic inflation of click fraud estimates, in fact consistently classifying an advertiser's best users (the 
ones spending time browsing their site) as fraudulent. As a result, conclusions based on this data are flawed and the small differences in overall percentages they report are not meaningful. And instead of protecting their businesses against click fraud, advertisers can actually harm their businesses by acting on recommendations from these reports."
He goes on to say that "Even so, given that they are not measuring click fraud, they apparently don't intend their numbers to reflect reality."
There is a good point he makes here. Even the third-party click companies have no idea of how it is that Google conducts their overall business and measurements. The quality companies even have some large holes they can't fill because of lack of data.
Just like in anything else, the marketplace is made confusing by those throwing out data that is flawed. Doing it for the purpose of putting fear in people and even for the purpose of selling them something else based upon trumped up data, is unethical at a minimum, and at the far end could be illegal.
What we need to do is look at the overall numbers and not try to figure out every nuance and click that may get away from us; there are far more important marketing efforts to do than that. Google seems to be honest and conscientious in this area, and at this time seem to be trustworthy and honest in their statements. Unless proven different, based upon real data, we need to concentrate on results and not inflated click-fraud numbers having no basis in reality.
We need to watch out for the types of data that are connected to selling us something to solve the problem. The data could be accurate or intentionally faulty to move us to buy something that we really never needed to in the first place.
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