I don't think the decrease in PPC is all that suprising. Once you've done it for a few years you start to realize that it's pretty much the least qualified traffic channel (behind organic). It depends on your keyword set and the specificity though.
I believe that many people saw PPC as a form of instant traffic that was at least somewhat qualified. But the offerings today with contextual advertising, behavioral targeting, etc, is such a better value. The emphasis will move away from raw traffic numbers to paying more for less traffic, but more qualified.
And the increase sponsorships may be an outgrowth of this idea in that it's another very qualified way of hitting your target.
Think about all of the opportunities that exist now and then weigh that against buying a keyword like "car" for $2 a click. It just doesn't make sense.
Anyway, the idea that it's all about click fraud I think is simplifiying. And maybe everyone just believes that it's click fraud because the traffic is so crappy that companies don't believe it's actual traffic.
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