Former deputy PM and member of the U.K. Labour Party, John Prescott, has been urging and instigating his followers on Twitter and supporters to click on Google pay per click ads from their opponents.

Prescott isn’t actually encouraging users to click on ads posted by the Conservative Party rather than on links to his own party. Instead he wants users to click on these ads in order to cost the Conservative Party money and make them bleed through their search engine marketing budget faster.

The logic behind this is simply that the Conservative Party pays for every click their ad receives. They could end up wasting their entire daily budget paying for clicks from Labour supporters and their ads would then stop showing.

In other words, John Prescott is encouraging his supporters to commit Click Fraud.

Click fraud was a major cause for concern for PPC advertisers in 2006, when a number of unscrupulous businesses hired rings of click fraudsters to keep clicking on their competitors’ ads till the competitors’ campaigns ran out of their daily budget, which would then mean that the competitors’ ads would stop showing for the given search term.

The Labour MP’s advice to his followers, may just boomerang on him, as the ultimate aim of any political party is to pass on their message and ideology to voters, which is precisely what is likely to happen when supporters of any party click on ads of the Conservative party and visit their site.

Moreover, voters would most likely tend not to look favourably upon a politician who encourages them to commit fraud, albeit online.

Click fraud has reduced not only compared to what it was in the first quarter of the year, but also compared to what it was in the second quarter of 2008. At present it is 12.7%, while in the first quarter of 2009 it was 13.8% and in the second quarter of 2008 it was 16.2%.

According to Click Forensics this data has been collected from ad campaigns of large as well as small advertisers spread over all of the leading search engines and over 300 ad networks.

The president of Click Forensics, Tom Cuthbert says, “The increased diligence of online ad networks to detect and block invalid traffic sources has contributed to the decline in the over all click fraud rate this quarter. However increasingly sophisticated attacks, such as publisher collusion fraud, continue to be a concern. Ad networks should pay close attention to such threats in the coming months.”

Publisher collusion fraud is a lot more difficult to track as publishers make use of bots and rotating IP-addresses to click on their own ads, thus raising their rankings and also increasing the commission which they earn from the ad networks, which cannot easily detect such invalid clicks from the valid ones.

These ad networks consist of lesser known sites that still manage to reach large audiences, at a much lower cost than the bigger, well known internet sites.

It would be great of course if they can achieve these figures.

A large part of this revenue is expected to come from small scale advertising. But lately there have been complaints from several small business advertisers that they are being billed for clicks they do not see on their trackers.

There have been complaints from various advertisers that a lot of click fraud has been occurring. In fact it ranges between 20 – 100%

The allegations also say that this is not a standard click fraud, where mischief makers click several times on an ad without making any purchases. Here the advertisers do not see any clicks on their tracking apparatus, but still they are being billed for these.

This is also not a network problem according to the advertisers as they have checked out on different servers at different DC’s.

Advertisers who have complained to Facebook about these discrepancies, and were asked to provide the appropriate logs were also miffed, that instead of owning up to the errors, Facebook has sent them a standard scripted reply.

A spokesperson from the Facebook communications team has said that Facebook is looking into the issue of suspicious clicks and has identified a solution, which they are implementing.

Facebook must remember that these allegations are serious, and if the matter is not resolved very soon, it may backfire on them if advertisers choose to leave them and use other networks instead.

Fraudulent clicks, for those who aren’t aware, are clicks that advertisers get billed for but were made by people who had no intention of buying the advertised product, but were only clicking on the ad with the intent that the advertiser ends up paying for these bogus clicks.

The majority of fraudulent clicks are usually initiated by competitors trying to run up an advertiser’s ad budget so that their ads stop showing once their daily limit is exceeded and by publishers trying to earn more money from the content network ads shown on their site.

Yahoo! uses a click protection system and have claimed to discard as much as 12-15% of clicks registered on ads before billing their advertisers. Last August they launched the Traffic Quality Center to help combat click fraud and “build the highest quality ad network possible.”

In a new endeavor against this menace, Yahoo! has teamed up with Click Forensics, a traffic quality management company that audits clicks received by an advertiser to fight against click fraud.

Click Forensics will act as an intermediary for advertisers and will work with Yahoo! on specific advertiser issues relating to click fraud. They will also provide Yahoo! additional data about the quality of traffic they are reveiwing. In other words Click Forensics will use their system to track the clicks and inform Yahoo! about the number of fraudulent clicks that an advertiser receives, and Yahoo! in turn will not charge the advertiser for these clicks.

Logically speaking, this is not in the best interests of Yahoo! However, if they want to attract advertiser dollars away from Google, they will have to show advertisers that spending their budgets on Yahoo! Search Marketing is worthwhile. Microsoft already do this by advertising the fact that advertisers see a much higher ROI on funds spent on adCenter versus that on Google.

Providing better clicks with a lower incidence of click fraud might turn out to be one of Yahoo!’s unique selling point, but it seems once again too little too late as most advertisers have already experienced the poor quality of their service and past refusal to deal correctly with reimbursement requests against fraudulent clicks on Yahoo!