The Cost of Spam

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A story in yesterday's New York Times notes that estimates of the costs imposed by spam are very squishy.

One company, Ferris Research, says the cost is $10 billion in the United States this year. The Radicati Group estimates the worldwide cost at $20.5 billion.

Another firm, Nucleus Research, shoots higher. By its reckoning, the economic cost is $874 a year for every office worker with an e-mail account, which multiplied by 100 million such workers amounts to about $87 billion for the United States.

The estimates seem to assume that a minute spent deleting unwanted e-mail is a minute not spent on productive work. Couldn't it just as easily be a minute not spent chatting with co-workers, shopping online, answering personal e-mail, or, say, reading a blog?

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  1. I prefer to think of it as a minute spent deleting an unwanted email is a minute spent not creating another unwanted email.

  2. This is a very common and fundamentally misleading way of blowing a problem out of all proportion by placing an absurd monetary value on a minor annoyance. The formula is simple. You estimate the time each individual spends on the problem each day — say 5 minutes stuck in traffic. You place an arbitrary value on the individual’s time — say $50 per hour. So 5 minutes a day stuck in traffic is worth, say $450 per year. Multiply that number by million of commuters and, presto, the 5 minutes I miss of the evening news tonight becomes a multi billion dollar problem.

  3. The cost figures are a bunch of bunk that assumes the worker is constantly productive other than the 1 annoyance that they are trying to focus on…spam.

    It seems most people have forgotten what email replaced in the first place…paper mail. I wonder what type of wonderful monetary figure one could get analyzing the current productivity of an email using employee to one with the same job 20 years ago that used paper mail.

    The large time they say a piece of spam takes to delete cracks me up, too. I’ve seen some that allocate like a minute to delete a single unwanted email. Sheesh, I can’t imagine how long it takes that moron to read a legit one at that rate.

  4. That is pretty hokey…an $847 Billion cost? So the GNP would be $847 Billion higher without spam? Even with all the spammers out of work, and the products sitting unbought in a warehouse, or never produced to begin with ( and all those people laid off or out of work)? Never mind about all those profitable anti-spam services that would be gone…I’m no economist, but I find this “cost” calculation *really* hard to believe. Besides, most workers are either paid by the hour ( not for their productivity, so spending even 5 minutes a day deleting spam wouldn’t affect their pay rate) or they are on salary( and get paid the same rate regardless of how long they spend working, provided they maintain the desired level of productivity, so it wouldn’t affect them much, either.) I suppose non-service industry, *commission-based* employees such as recruiters, brokers, etc *might* be affected a little more affected- if they bungle a high-pressure deal by choosing that *exact minute* to clean out their inbox.
    A better calculation would be to say something along the lines of: The average white-collar/professional worker in a poll wastes 3 minutes a day at work deleting e-mail- that’s 15,000 man-hours a year( enough time to build the brooklyn bridge twice over!) rather than these absurd dollar amounts…

  5. The cost of SPAM to the economy as a whole (like the cost of say, steel tariffs) is inherently incalculable. The cost to your ISP, and IT dept. on the other hand, is a more solid (read; non-squishy) calculation. SPAM is a serious problem in need of a solution. I’ve yet to hear a viable one. I’m convinced that it can only be effectively dealt with by: a) A market based, non-government mandated/regulated scheme that b) shifts the cost to the sender. If a one-dollar fee could be charged for every 10,000 emails sent, I think that would greatly reduce the SPAM traffic while imposing almost no cost (perhaps even a cost savings) to everyone else.

  6. Considering that AOL recieves twice as much Spam each day as it’s users send, then in theory, 2/3 of the cost AOL pays for their email network are spent maintaining capacity for something nobody wants.

    I’m sure that has a dollar value.

    And what of the dollar value of HD space and bandwidth it takes up globally?

    It’s a purity problem. If I figure I’m going to take 5 minutes to check an email, and get distracted and spend 10 minutes deleting Spam in addition to that – the time has to come from somewhere.

    Either it comes from work time – or from my free time (which to me is MORE VALUABLE). Either way it’s time I’ll never get back.

    You’d think Libertarians would be in favor of how I choose to waste my time.

    If I want to have anything to do with email, I must deal with the impurity that is Spam.

    And finally, when a mailbox gets full of junk mail, the server simply refuses all other messages. The other messages could be important or legitimate – but the sender will never know.

    Most online commerce sites and banks send reciepts and delivery status via email (for example, Discover Card will email to verify that your payment has posted). This is one way that Spam directly interferes with Interstate Commerce (at least in my life) – so much for free markets.

    Spamming is just as bad and does just as much damage each year as hacking and writing viruses. Since it nibbles away at your time little by little, the ignorant dismiss it as a threat.

  7. Warren, the infrastructure upgrade required for that solution will sure benefit the makers of the software. Everyone will have to upgrade to support such a scheme.

    I guess you could chalk it up to the cost of dealing with Spam – but it’s not fair to count implementation time for such a solution – that’s a squishy number that doesn’t exist and has no real value. 😉

  8. Neb,
    Perhaps, but not necessarily. My idea is that if a few big email providers (AOL, MSN and Yahoo) could imposed such a fee on their customers and charge problem domains to deliver to their customers. They could maintain a list of other ‘good’ domains that effectively prevent users from originating SPAM and deliver email from them as they do now. Email originating from a domain not on the list would be bounced back to the sender requiring a micro-charge to be paid for each address to be delivered to. I’m sure there’s something about this that makes it unworkable. I’ve read quite a few other, sometimes similar ideas on dealing with SPAM and there has always been some fatal flaw the author didn’t appreciate that sinks it. As I said, I haven’t found one that holds up to scrutiny, but I do think it needs the two properties I mentioned.

  9. Software is the answer, not charging people for sending mail. There are tons of filters out there that do a fairly good job that most people just aren’t aware of. Here are some other tips.

    There are more efforts these days to create successful software solutions, which will create jobs and business opportunities.

    Tallahassee Technologists Seek spam solutions

    Keep fees and legislation off my email.

  10. I’m sure spam has already reduced my life expectancy by five years. Its so damn salty.

  11. I can delete spam while I read blogs. Efficiency requires multi-tasking.

  12. I spend about 2-3 hours a day doing non-work related things on the internet. I’m not unusual in my office or in the workplace in general. This means if the average office worker spends 2.5 hours a day doing this, tallied at twenty dollars an hour, that’s $250 a week, and $12,500 a year for the average worker. 100 million workers gives the result of the internet costing $1.25 trillion per year. Maybe it’s time to get rid of this thing.

  13. Recovering Philadelphia Lawyer (04:32 PM) get yourself a VCR, set it for the same time each evening, and you won’t have to miss those lousy 5 minutes of evening news, ever.

    (“Lousy” because you’re really not missing much, even if you did.)

    And please stop tailgating me in traffic. Red light up ahead tells me I’m not really in your way.

  14. I wonder what the cost to the economy of employees picking their nose is. Add that to the cost of adjusting your hair, cleaning your nails, scratching, looking out the window or staring off into space…why, my god, if only we could discover a way to make people work at maximum capacity every available minute, I bet we could make hundreds of trillions of dollars!

    …yay?

  15. One solution is to penalize ISP’s who allow spam by denying access for an exponential amount of time.

    First spammer who uses their network gets the ISP disconnected for maybe a minute per spam sent.

    Second spammer from the same ISP is penalized for one minute per spam sent from the second spammer, plus an exponential multiplyer.

    Eventually, after the 100th spammer or so, the ISP is being knocked offline for weeks at a time – that’s monetary incentive to do something about spam.

    The same would go for people who host web sites advertised in spam, and for servers hosting open relays.

    In other words, if someone is pissing in your pool, kick them out of the party.

    We have a lot of poorly concieved “free email” sites out there that spammers exploit to send their messages, and there are a lot of misconfigured mail servers as well. Simply bad netizenship.

  16. EMAIL: pamela_woodlake@yahoo.com
    IP: 62.213.67.122
    URL: http://digital-photo-album.online-photo-print.com
    DATE: 01/20/2004 12:21:11
    Man is the missing link between apes and human beings.

  17. EMAIL: nospam@nospampreteen-sex.info
    IP: 195.94.1.122
    URL: http://preteen-sex.info
    DATE: 05/20/2004 12:57:11
    The function of the artist is to provide what life does not.

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