The economic costs of spamming

Spamming isn’t just a nuisance. It represents a considerable cost borne by its victims. A brief overview of the economic damage caused by spam.
In 2005, Ferris Research calculated that spamming was costing organizations around the world $50 billion, including $17 billion in the USA alone. In 2009, the same company estimated the cost of spamming at 130 billion worldwide, including 42 billion for the United States. More than the sums involved, which are already extraordinary in themselves, it’s the progression that’s incredible. What are the components of this high cost?

The first component is the decline in productivity. When spam manages to bypass the various protections in place, it wastes the employee’s time: he has to open it, read it, conclude that it’s spam and delete it. As long ago as 2003, Brightmail (since acquired by Symantec) calculated that spam accounted for 10% of total e-mail volume, and that an employee wastes an average of 30 seconds deleting them. He calculated that the annual cost of spamming for an organization with 10,000 employees is $675,000. Nucleus Research, through interviews with system administrators and employees at various US companies, notes that the time taken by employees to deal with spamming has fallen from 30 seconds in 2004 to 16 seconds in 2007, but nevertheless observes a loss of 1.2% of employee time, which amounts to an annual cost of $712 per user (not counting the time spent checking quarantined messages or searching for a legitimate message that has gone astray).

Secondly, higher personnel costs are an inevitable consequence: dealing with spam requires staff, firstly to set up and maintain the anti-spamming infrastructure (1 person for every 690 employees according to Nucleus Research), and secondly to assist users who are bound to run into problems (lost e-mails, etc.).

Third component: infrastructure costs, particularly for ISPs and e-mail providers. These costs break down into anti-spam software and hardware, electrical power to run servers, additional bandwidth and storage capacity: spamming means exponential growth in traffic and data to be stored.
Fourth component: damage resulting from malicious programs. A number of spam messages are accompanied by viruses, trojans, worms, spyware, etc …

Fifth component: what in economics are known as opportunity costs (very briefly, these are the gains that could have been made if a different decision had been taken). In the case of spamming, a malfunction in the email processing system due to an influx of spam can lead to a loss or delay in the processing of customer emails (loss of revenue); valid messages can be overlooked, which is detrimental when they are customer messages, for example; it can also mean less effective promotional emailing, as potential customers no longer trust this type of message due to spam.
The sixth and final component is loss of reputation. If a company’s system is slowed down or paralyzed because it’s flooded with spam, or if customers’ or partners’ e-mails are lost and contracts are therefore not concluded, the company’s reputation is severely damaged. The same applies if spammers have usurped the company’s identity for phishing purposes. The company will then be associated with this type of spamming for a long time to come.