CYBERSPACE – According to a report issued by San Antonio-based web analytics firm Click Forensics on Monday, the rate of fraudulent clicks increased to 14.1-percent during the second quarter of 2006, up from 13.7-percent in the first three months of the year.Click Forensics reports that the click fraud rate was greatest for “high-priced” terms, which the company defines as terms that cost the advertiser more than $2 per click. According to Click Forensics, the fraud rate for such high end terms runs at just over 20-percent.

Another recent report, published by consulting firm Outsell, set the fraud rate at 14.6-percent, with resulting lost revenue at more than $800 million.

Representatives of Google and Yahoo, sites with click fraud rates of 12.8-percent according to the Click Forensics study, were skeptical of the validity of the reports, but acknowledged that click fraud remains a vexing problem for the pay-per-click advertising model.

Shuman Ghosemajumder, Google’s business product manager for trust and safety, said many click fraud reports, including the one published by Click Forensics, depend on flawed methodology, and pointed out that the reports do not take into account whether or not advertisers were charged for the fraudulent clicks in question.

“The vast majority [of fraudulent clicks] are detected in real time and filtered out before they affect advertiser accounts,” said Ghosemajumder, according to CNET News.

Gaude Paez, a spokesperson for Yahoo, concurred with Ghosemajumder regarding the questionable methodology used in such reports, and suggested a conflict of interest as well.

“One of the most pressing issues our industry faces right now is the lack of common standards and definitions around click fraud,” said Paez. “Advertisers are faced with numerous conflicting estimates and definitions, often promoted by companies that have a vested interest in selling click fraud solutions.”

Paez acknowledged that the company was concerned about click fraud, which is why “Yahoo has committed to working with a reputable third party toward building industry-wide efforts to combat click fraud, including development of industry-wide definitions of click fraud and a comprehensive list of identified bots.”