We sure got spanked by Google when we innocently asked people to click on our ads, but it looks like real live click-fraud is getting serious. Here’s a massive article on Yahoo News about fraud, the industry, and what is going on. Some highlights here:

“Once widely ridiculed, the idea has turned into a fast-spreading craze as more merchants realized substantially higher returns on search engine ads than on more traditional marketing campaigns conducted through the Yellow Pages, direct mail and newspapers. By 2008, industry research firm eMarketer expects $7.4 billion to be spent on search engine advertising, up from just $108.5 million in 2000. The success of search engine advertising has substantially raised prices, too.

“In mid-1999, advertisers paid Overture an average commission of 11 cents per click. By the end of last year, advertisers were paying an industrywide average of $1.70 for the hundreds of keywords tracked by Fathom Online. The cost of prized search terms runs much higher. For instance, the top price for mesothelioma, a cancer that spurred scores of lawsuits linking the illness to asbestos exposure, recently stood at $51 per click, Fathom said.

“Higher prices have turned click fraud into a cottage industry.

“Some swindlers have hired cheap overseas contractors to sit in front of computers and click on targeted links all day. Others are developing sophisticated software to help automate and conceal click fraud. On the other side of the fence, entrepreneurs like Dmitri Eroshenko are trying to develop technology solutions to counteract click fraud.”