Bam! You're number one in Yahoo - what could be easier.

What new advertisers don't know, and it's not listed in the fine print, is that there is an inherent downside to PPC engines. A downside, that only gets bigger as time goes on.

Let's say you set your account up in Overture and you place $500 to buy keywords for the next month. You are happy with your purchase and you can't wait till the next day when the phone will start ringing and the e-mails will come flooding in.

You go to your computer the next day, log on to the advertiser interface and notice that you have gone through all of your monthly budget overnight and have not received one e-mail or phone call.

You have most likely just been a victim of click fraud.

Click Fraud is when a business receives invalid clicks on paid listings by a competitor or individual who has no intention of using your services. A click is invalid when an individual does it for the sole purpose of costing you money or financial harm. Click Fraud may occur from competing advertisers or simply individuals just wanting to harm or frustrate others.

What typically happens in all pay per click engines is that where people are making money, there is some form of monetary predation. So in a nutshell most advertisers experience some form of click fraud, even if on very low levels.

This advertising flaw stems from the competitive nature of the bidding system. For an advertiser to take advantage of the maximum benefits from Overture's pay per click system, a company must bid in the top three positions of Overture. When a company can maintain one of the top three positions, their ad is displayed throughout the Overture network, which consists of Yahoo, Alta Vista, MSN and Lycos among others.

When a web user goes to Overture directly or any of the Overture partner sites, the user cannot simply hit a site repeatedly on the same keyword and accumulate chargeable clicks. Overture's system monitors the usage through an elaborate proprietary filter that looks at the click to determine its validity.

Mischievous individuals will often execute click fraud through Overture's partner sites so that it is harder to detect the fraudulent activity.

For instance, take the keyword "health insurance", for example. If you were to go into Overture and click any of the sites bidding for position, you will cause the business to pay for that click. On the other hand, if you back out and click the site again (from the same page) the second click will not accrue money on the client's account.

However, when that same user goes to another network partner like Yahoo or Alta Vista, types in the same keyword, clicks on the same web site, it can and usually will count against the bidding clients account.

Sites that are most susceptible to fraud are usually the companies that are in the top five or better listings - as well as industries where frequent bidding wars occur.

Overture and Google are both well aware of this problem and have taken technical measures to determine and identify improper use of their systems. Overture addresses the issue by distributing the following information to interested parties:

"Our Click Protection System is sophisticated software that evaluates each of our advertisers' clicks. This software makes decisions as to the validity of any click. Our (Overture's) Click Protection System uses search and click data to make both rules-based inferences and pattern recognition-based inferences about which clicks are valid clicks. We have two patents pending related to this technology, so we cannot currently disclose too many details about the methods we use. While the details cannot be disclosed, the core mechanics involve many data points. Each click is evaluated along 20 to 50 data points. Some of the data points evaluated are:

• IP address
• User session information
• User cookie information
• The network to which an IP belongs
• The user's browser information
• The search term requested by the user
• The time of the click
• The rank of the advertiser's listing
• The bid of the advertiser's listing
• The time of the search
• The time of the click

If the data points indicate that the click is not a valid one, our Click Protection System marks the click in our billing system, and the advertiser is not charged for it. However, we are unable to remove the click from the advertiser's own Web logs."

The software will detect some, but not all fraudulent activity. If you the bidder- are suspicious of the activity of your account, you should contact Overture's client services department where they have click activity specialists that will do an investigation of your account activity. If they determine that the suspicious activity may be valid, they will conduct a more thorough and detailed investigation.

The single best way to help Overture help you - is to be prepared with raw data when making a claim.

There is really no way to prevent click fraud. As competition increases and more companies turn to PPC advertising, this problem can only get bigger. Overture's click protection system is not fool-proof, so you as an advertiser must take some responsibility and check for suspicious activity.

The first step is to obtain your website's server logs if you don't already have them. Your web host should usually be able to provide them.

The items to look for when analyzing your logs are:

• Repetition of IP Addresses
• An irregular or large number of clicks coming from the same geographic region or country.
• IP addresses belonging to cloaking software companies
• Keywords that normally do not get any traffic are now getting an unusually high number of clicks.
• Your click throughs have doubled or tripled without having had any bid changes or rank changes

Google's distributed information is very similar as their web site states:

"Google closely monitors all clicks on AdWords Select ads to ensure that there is no abuse of the program. This includes analyzing all clicks to determine whether they fit a pattern of fraudulent use intended to artificially drive up an advertiser's clicks. Google's proprietary technology automatically distinguishes between clicks generated through normal use by users and clicks generated by click spamers and automated robots. As a result, we're able to filter out clicks you don't want and ensure they don't show up on your reports or bills."

Both Overture and Google want to preserve the integrity of their engine's bidding environments. After all, when it becomes too discouraging for a business to effectively bid, the advertiser will pull up stakes and leave the system.

The following is some solid information that will help people identify and rectify the problems if and should they ever surface. While this information is basic, it has been proven to work for companies to have some recourse to mischievous activity.

1. Get your data ducks in a row. Compile statistical data so when making your claim to Google or Overture, you provide very concise information for them to pursue.
2. Don't make claims based on speculation or suspicion.
3. Have a good statistics program like Web Trends.
4. Monitor your bids daily and set aside some extra time for a weekly and or monthly review. Keep an eye out for new top-level bidders and document their appearance in the lists.
5. Stay on top of Overture/ Google. If your claims have credibility and you do your homework, it will be easier for you to develop long-term contacts inside.

The bottom line is you've got to do some of the investigation yourself and not rely 100% on the pay-per-click companies catching all suspicious activity.