The Inside AdWords blog has posted an official report on Google’s overall click fraud numbers.
“Activity – invalid clicks fluctuate constantly but average less than 10% of all clicks
Our invalid clicks rate – the activity rate – has remained in the range of less than 10% of all clicks every quarter since we launched AdWords in 2002. At Google’s current revenue rate, every percentage point of invalid clicks we throw out represents over $100 million/year in potential revenue foregone.”
“Impact – less than 0.02% of all clicks are reactively detected as invalid
Our Click Quality team investigates every inquiry we receive from advertisers who believe they may have been affected by undetected click fraud. Many of these cases are misunderstandings, but in most cases where malicious activity is found, the clicks have already been filtered out (and not charged for) by our real-time filters. Because of the broad operation of our proactive detection, the relatively rare cases we find of advertisers being affected by undetected click fraud constitute less than 0.02% of all clicks.”
There have been many Google AdWords click fraud reports in the past and this seems to clear up a lot of questions about how Google combats this issue. Search Engine Land and Search Engine Roundtable also cover this with further information including definitions of terms such as invalid and fraudulent clicks.