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The Cost of Spam

AUGUST 16, 2006

There is something fishy going on.

By Ben Macklin - Senior Analyst

FBLI
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Spam is the scourge of the Internet. It clogs inboxes, crashes servers, wastes time and money and is an abuse of privacy. More than half of the two trillion e-mail messages sent in 2006 are likely to be spam. According to the anti-spam Website Spamhaus Project, about 200 spammers worldwide are responsible for about 80% of all spam in Europe and North America. There are an estimated 2,300 spammers in the US.

Spam is one of the costs one pays for being online. Most of us are prepared to pay that cost because the benefits of being connected to the Internet far outweigh this cost, but data from Consumer Reports' "State of the Net 2006" report puts some figures to that cost.

Measuring spam, viruses, spyware and phishing, Consumer Reports estimates that American consumers spent at least $7.8 billion for computer repairs, parts and replacement over the past two years as a result of viruses and spyware alone. Add in the cost of phishing e-mail scams and lost productivity dealing with spam, and the figure is probably double.

Leading Online Hazards in the US, 2006 (frequency of incidence, cost per incident and cost of total damages)

So not only do consumers suffer the direct cost of spam, viruses and the other online diseases, but consumers also have to fork out money to inoculate their computers from these threats. Data from Arbitron/Edison Media Research shows "blocking software" is in use in almost three-quarters of US online households in 2006, which is a massive increase from 2003.

Types of Spam and/or Advertising that US Online Households Have Software to Block, July 2003 & January 2006 (% of respondents)

Spam will continue to be a problem for as long as some businesses see some value in it. According to recent news reports, a well-organized spammer can send between 60 and 70 million e-mails a day (two billion a month). On average, there is a positive response to 0.05% of those e-mails, potentially delivering 36,000 e-mail leads per day to the companies that use spam.

Confirmation of the value of spam was also revealed in a recent Consumer Reports report, which indicated that nearly 800,000 US households bought products advertised via spam.

But the problem of spam does not just lie with those organizations that send out the spam, but also with the network operators that knowingly allow the distribution of spam. Who might these evil perpetrators be? According to the Spamhaus Project, the top offenders are network operators we are all familiar with. Take a look at them here.

For ways to use e-mail to market your products and services legally and ethically see eMarketer's E-Mail and Word-of-Mouth marketing report. 

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