The meteoric rise of search engine marketing (SEM) has been well documented, but marketers have been reluctant to discuss the growth of click fraud. That is changing.

Search engine advertising has become too big a business for major search engines, such as Google and Yahoo!, to ignore the damage — real or imagined — click fraud is doing.

An article in The New York Times, "Marketers Demand Better Count of the Clicks," reports how a group of large companies that includes Kimberly-Clarke, Colgate-Palmolive and Ford Motors is demanding that online publishers hire auditors to check ad and viewer counts and that they do so no later than the middle of next year.

In Mr. Mazumdar's opinion, this is a positive development because it legitimizes the Internet as an advertising medium. Not everyone is so upbeat.

According to the "Search Marketing: Successfully Combating Click Fraud and Other Concerns" report from JupiterResearch, while click fraud worries only 17% of small marketers and 21% of mid-size marketers, 39% of large marketers view it as a problem.

"Although search engines are attempting to educate marketers about the origin and measurement of click fraud, marketers should consider the possibility of click fraud occurring across all PPC [pay per click] networks — instead of only Google, Yahoo and MSN," Internet Retailer quoted the report as warning. "As PPC campaigns expand in inventory and size and breadth, marketers must plan to monitor all publishers and PPC networks in which they participate."

A lawsuit was filed last month in Pennsylvania seeking class-action status against Google. In addition, the FBI, SEC and US Postal Service are all investigating click fraud.

Of course, before you can really understand click fraud, there has to be agreement on what a click is. That is why last month the Interactive Advertising Bureau, in conjunction with the Media Rating Council, announced the launch of an industry-wide effort to identify criteria for defining a "click."

An attempt will be made to establish clear differences between valid, invalid and fraudulent clicks.

An article in The Washington Post, "'Click Fraud' Threatens Foundation of Web Ads," cites Yankee Group as concluding that if more aggressive measures are not put in place to validate clicks, fraud could undermine the entire business model of Internet search engines by causing advertisers to lose confidence in the medium.

Yankee Group estimates that fraud affects one out of every 10 clicks on text ads, not far from Google's rough estimates. The research firm estimates that this equates to a $500 million-a-year problem. Other consultants put the figures much larger, closer to a $1 billion-a-year loss, affecting as much as 30% of all ad clicks.

Though search engines have taken steps to "self-regulate and police" their ad networks, Jennifer Simpson of Yankee Group told The Washington Post, that these efforts have been "insufficient."

For more information on this development, read eMarketer's Search Marketing: Players and Problems report.