There is a lot of buzz over Andy Beal's Exclusive: Google’s Click Fraud Rate is Less than 2%. In short, Shuman Ghosemajumder of Google sat down with Andy and explained to him how to get these figures. Andy recently updated his post after Ghosemajumder took a look at his post saying;
UPDATE: Ghosemajumder has clarified that my assumptions of less than 2% should be based on “invalid clicks”, which means the actual number is more likely just a fraction of one percent!
Danny has a great commentary on Andy's report;
So to be clear, two percent of all clicks are investigated by Google as being possibly fraudulent after billing has happened. Some amount of fraudulent clicks, of course, are never reported. That will take the figure up. However, some amount of the investigated clicks will be cleared of fraud, taking the amount down.