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     industry

This note supplements the broader discussion of electronic junk mail (spam, speam and spim) elsewhere in our Security & InfoCrime guide. 

It covers -

• introduction
• economics
• targets
• exposes

     introduction

Spam is used by direct marketers because mailing lists are readily available (eg can be purchased from specialists or generated from databases of all inquiries to a web site), because it is 'easy' - a few keystrokes and a message appears in email boxes all over the world - and because sufficient recipients respond to make the mailout commercially viable. 

The average cost per thousand addresses for permission-based email lists is between US$200 and $600 (with a response rate of 3% to 10%). For addresses marketed by spam merchants the average cost is between 0.1 and 0.025 of a US cent (with a response rate of up to 0.5%). As they say in the US, do the math - enough people respond to spam to make it worthwhile.

It is not uncommon to receive offers - via spam, of course - for a three CD set that supposedly contains "300 Million Email Addresses and 1.5 Million USA Business Fax Numbers" for a mere US$99. The disks claim to offer email addresses of people living in all US states (broken down by area codes) and addresses of people -

• interested in gambling
• running a home based business
• interested in online shopping
• interested in gardening interested in golf.
• interested in fitness, weight loss, etc
• "people interested in Opt-In"
• "who have bought more than $1,000 over the Internet in the last 2 months"
• interested in traveling and vacationing.

along with 25 million verified AOL, Compuserve & MCI addresses. 'Dictionary attacks' used by spammers simply involve automatic generation of email addresses for individual domains, with the spammer's machine sending a message to each address. The ones that don't bounce as undeliverable are valid email addresses that can be spammed.

Spam is also used because some marketers claim that response rates are significantly higher than those for traditional junk mail (eg 0.5% rather than 0.001%), although such figures are problematical. We have highlighted some issues in our Marketing guide.

Figures on investment by marketers (eg the 132 page PDF from eMarketer) are even more contentious than those on traffic. However, it is common to see claims that

that companies in the US and EU are now spending upwards of US$2.5 billion pa on electronic direct mail

the cost of generating email lists 'in-house' and actioning them is in the order of US$2 per head, in contrast to direct snail mail of US$18-100 ph and purchase of snail mail lists at around $280 ph.

     response costs

And the cost?

In 2003 Ferris Research claimed that the cost of spam in the US was US$10 billion per year. Radicati Group - noted for the claim that "email failure is more stressful than divorce" - estimated that the global cost for 2003 would be US$20.5 billion. Nucleus Research claimed US$87 billion for the US alone in 2003.

Those figures - and similar estimates from Australia and the EU - are problematical because they appear to assume that all messages are individually scrutinised by recipients and then manually deleted. In practice many consumers appear to be manually identifying and preemptively deleting spam on the basis of the message title, the sender's email address or even the ccTLD (with the exclusion of much email from Romania or S Korea).

Others are actively using filtering tools, which for example allow a recipient to add all messages from a particular address or with a particular title to a personal filter.

     exposes

For views from inside the industry see works such as Spam Kings: The Real Story behind the High-Rolling Hucksters Pushing Porn, Pills, and %*@)# Enlargements (Sebastopol: O'Reilly 2004) by Brian McWilliams, Inside the SPAM Cartel (New York: Syngress 2004) by Spammer-X and Spam Wars: Our Last Best Chance to Defeat Spammers, Scammers & Hackers (New York: Select 2004) by Danny Goodman.

Self-described 'King of Spam' Scott Richter disingenously commented

we don't spam. The biggest problem is when people get an e-mail that they think they didn't sign up for or don't remember signing up for, and they call it spam. Well, that's not spam.
[Q: So even when people don't realize that they signed up to be on an e-mail marketing list, is it their own fault?]
It's probably confusing to people, but that doesn't make it spam. People don't realize when they sign up for sites with free giveaways, free contests, that's how those sites get members.

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