17.1% of all clickthroughs on web advertising are the result of click fraud – the act of clicking on a web ad to artificially increase its click-through rate – according to the latest report from Click Forensics, a company that specializes in monitoring and preventing internet crime. The level of clickfraud is the highest the company has seen since it started monitoring for it in 2006, dashing our hopes that it might hold steady in 2008. The company recorded a rate of 16.3% in Q1 2008.

Also alarming is the fact that over 30% of click fraud is now coming from automated bots – a 14% increase from last quarter and the highest rate Click Forensics has seen since it started collecting data. Click fraud for ads on content networks like Google AdSense and Yahoo Publisher Network was up to 28.2% from 27.1% last quarter, though that figure has decreased since Q4 2007, when it was at 28.3%. Outside of the US, Click Forensics reports that the most click fraud came from Canada (which contributed 7.4%), Germany (3%), and China (2.3%).

Click Forensics also notes that it has seen a reemergence with some old-hat tricks, like link farms. The company speculates that the increase may be tied to the poor economy, which has spurred a rise in activity like phishing and other cybercrime.

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One good quarter does not make a trend, but there is a glimmer of hope in the fight against click fraud (fake clicks that can nevertheless cost advertisers money). Click Forensics is reporting that the overall click fraud rate was down half a percentage point in the first quarter to 16.3 percent. Although that is still higher than the rate was a year ago, it could be an indication that Google’s and Yahoo’s efforts to filter out bad clicks on search and contextual ads and improve the overall quality of those ads is starting to have an effect.

When you look at the click fraud rate on their respective content networks where the worst offenses occur, AdSense and the Yahoo Publisher Network, the click fraud rate there also dipped slightly to 27.8 percent from 28.3 percent in the fourth quarter. That is still nearly a third of all clicks and needs to seriously go down further.

Perhaps this year the overall click fraud rate can be held steady instead of rising 15 percent, as it did in 2007.

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Advertisers and Website can subscribe to the company’s service, which claims to be able to identify fraudulent clicks on ads, and even clicks from competitors. Of course, if Google were to ever defeat click fraud, Click Forensics would be out of business. But what is the chance of that happening?

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