Spam Costs $20 Billion Each Year in Lost Productivity

A New York technology industry research firm confirmed the complaints of consumers, analysts, office workers and lawmakers by blaming the unsolicited e-mail known as spam for nearly US$20 billion in lost time and expenses worldwide.

On the basis of several factors, such as productivity and bandwidth losses, New York consulting firm Basex reported that spam within the enterprise can cost between $600 and $1,000 per year for every user. While the $20 billion estimated loss falls in line with other industry estimates on the annual price of junk e-mail, Basex indicated the setbacks are growing at a rate of nearly 100 percent per year.

“Given an environment where virtually anyone can purchase a list of 25 million e-mail addresses for $25 and send e-mail to all 25 million at practically no cost, it should come as no surprise that spam has become such a scourge,” wrote Basex chief analyst Jonathan Spira in a report titled Spam E-Mail and Its Impact on IT Spending and Productivity.

Spira told TechNewsWorld that the spam problem is likely to get worse before it gets better, despite legislative and corporate efforts to fight it, which are limited by geography and jurisdiction. “My take is that we need an entirely new way to fight the scourge of spam that hasn’t been invented yet,” he said.

Spent on Spam

Basex listed lost productivity, clogged e-mail systems, bandwidth, storage costs, user support and antispam software among the costs of spam for corporations. Spira added that a significant portion of the losses associated with spam have a negative impact on IT spending and on monies that would have been spent on other initiatives if it were not for the fight against junk e-mail.

Indicating that spam now accounts for nearly half of all mail server traffic, Basex referred to a recent U.S. Federal Trade Commission test that resulted in more than 3,300 spam messages being sent to 250 e-mail addresses posted on Web pages, chat rooms, news groups and directories after six weeks. The first message came just nine minutes after one address had been posted in a chat room, according to Basex.

The research firm also estimated that in their efforts to keep spam from reaching company inboxes, corporations spent more than $600 million to deploy spam-fighting software and other measures in 2003, a figure expected to grow to $2 billion by 2005.

Frustration Factor

Basex said a recent survey revealed that spam is overwhelming users, who spend an average of 15 minutes per day deleting the unwanted messages. In addition, another danger to productivity is that users can inadvertently delete legitimate e-mails that are either misidentified as spam or lost in the “sheer volume of spam.”

Basex also referred to losses to legitimate e-mail marketers, which are suffering as users refrain from giving out their e-mail addresses. These legitimate e-mail marketers — which typically use an opt-in approach — often are lumped in with spammers who falsify the origin or nature of their unsolicited messages.

“As a result, the companies who send these mailings miss out on revenue, and the recipient may miss an important product or service that is actually desired,” Spira wrote.

Forrester analyst Jan Sundgren told TechNewsWorld that in addition to the volume of spam and its resulting expense, enterprise workers remain frustrated by even the limited amount of unwanted e-mail that slips through filtering nets, because it is often pornographic or otherwise offensive material.

Dubious Outlook

Basex pointed to the increased efforts to fight spam, which include legislative measures such as the recently passed federal Can-Spam Act and Microsoft’s announced collaboration with New York Attorney General Eliot Spitzer to sue an alleged spam king accused of adding to the deluge of junk mail.

Industry analyst Joyce Graff told TechNewsWorld that the efforts are likely to have a deterrent effect on spam “because finally we’re having some laws that make sense.”

However, Graff indicated the tide of spam is likely to continue rising as long as there is financial incentive for people to send unwanted e-mail.

“I don’t think it will get worse before it gets better, but it will not have a big drop-off effect,” she said.

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