Costs (Why Spam is a Problem)

Commercial E-mails vs Spam

Commercial e-mail from reputable organizations can be quite profitable and generate few complaints at the same time. What differentiates them from regular spam is that commercial e-mails of this type would be carefully directed to known customers with some sort of pre-existing relationship. There are three large advantages to this type of advertising:

• Average unit price of an e-mail sent in the U.S. is $0.10 compared to $0.50 to $1.00 for postal mailings.
  
  
• Sales conversions are between 5 and 15% while conventional mail has a 0.5% to 2% rate.
  
  
• Click-through (response) ratio for e-mails is about 18% while ad-banners have a rate of 0.65%

Costs

Spam is commonly compared to paper junk (snail) mail. There is a difference, however, as junk-mailers must pay third-class or bulk postage in order to deliver their advertisements. Spammers pay very little of the transmitting costs, if any at all. The cost of delivering the message is passed onto the recipient, ISP or network owner in the form of additional bandwidth, disk space, server resources and lost time and productivity. It is analogous to sending out junk mail advertising with POSTAGE DUE. While the time and effort that each person has to put in to deal with one single piece of spam is very little, the shear volume of spam is what it so expensive. A study by the European Commission reports that 500,000 pieces of spam are sent out to unsuspecting users every day and this costs internet users $9.3 Billion (U.S.) a year in connection costs alone!

The Gartner study reports that although 64% of the people who complain about spam complain to the sender, 53% complain to their ISPs. It also found that UCE was tied for fourth among the top reasons that users switch ISPs. At that rate, an ISP with one million subscribers would lose nearly $6.9 Million (US) in cumulative lost subscription fees alone over a 12 month period. Assuming that ISP had between $5 and $10 million worth of telecommunications and computer equipment, the extra infrastucture costs to deal with spam would range between $125,000 to $250,000 a year. Factor in a fully dedicated software engineer, network administrator and five customer support representatives all to deal with spam, then the additional salary burden jumps to over $450,000 per year.