This leaves me with #3 and #5. The Google and Yahoo folks give their 'we have people watching and a lot of technology that prevents click fraud, and we prevent a lot and pro-actively give refunds' line at every conference in response to the inevitable question about click fraud. I'm sure every word of it is true. But I also don't believe for a second that any of them believes that they're catching anywhere near 50% of the attempts. Nor does anyone in the audience who has spent any time understanding or thinking about the issue.

So let's think about what's implied by the headlines and subtext. Should that really change your PPC behaviour? If you're running paid search campaigns and carefully measuring your returns, and only continuing with campaigns that make you money (at whatever return you deem acceptible) then fraud represents lost potential (ie you could have made more) but numerically understanding it (which you still don't) shouldn't change your current behaviour.

Is it bad? Should it be stopped? Should the engines do more? Are advertisiers partially responsible? Yes. Yes. Yes. Yes.

Why are advertisers responsible? Because the vast majority (I use the same source for my stats as the report, I repeat that which I vaguely recall reading somewhere) don't measure or monitor their analytic AT ALL and so don't get to report even the most blatent fraud. To be fair, aggressively monitoring for fraud is very hard work and very time consuming. None of the analytics providers (even Google Analytics) provide really strong tools aimed at this. And only a small percentage of fraud is the '10,000 clicks from Brazil today' kind.

Back to #5. Assume for a moment that 14.6% of clicks are fraud. Even if it's true, it may not be the #1, or #2 largest source of waste for paid search advertisers. Sloppy keyword development - in terms of too many words, poor use of the matching options, missing negatives, etc. - which results in ads running on terms that individually produce very low ROI is almost certainly #1. Curing this requires first measuring results on a keyword by keyword basis and then taking action. I've read the numbers but can't recall them now, but would be SHOCKED if 33% of advertisers have keyword-level ROI tracking.

There are many others; buying ads for items temporarily out of stock, pointing ads at home pages or other landing pages which show no relation to the search or the ad creative, using creative so badly written that it invites clicks from those with intents the advertiser cannot satisify, even good landing pages connected to purchase processes that frustrate users at rates as high as 90% (which we've seen many times).

Click fraud is a huge problem. Both ad networks, advertisers, and analytics vendors need to take it much more seriously. If a fake number is what it takes to raise awareness, so be it. But there is very little most PPC advertisers can do, beyond policing their own results and even that will only catch a tiny fractions.

But don't dispair. There are lots of other things most advertisers can do to dramatically improve their campaigns. Take your anger about the "14.6%" you're losing to fraud and put it to work on other aspects of your campaign - if you do maybe the fraudsters did you a favor.

Update: Check out what the Google CEO thinks about all of this.