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The True Cost of Spam
By Tom Geller Executive Director, SpamCon Foundation I GET A LETTER EVERY ONCE IN A WHILE from someone asking about "postal spam" or "telephone spam". These letters are generally of two types:
Just as often, they're angry that anyone would be upset by a little spam. After all, the argument goes, spam takes the place of those more-invasive forms of marketing. Phones must be answered; paper mail must be carted to the trash. But with spam all you have to do is "hit delete", right? (There was even a rumor that antispam activists were part of a secret "lumber cartel" to ensure that marketers would continue to send "tree-based" paper mail!) http://info.astrian.net/jargon/terms/l/Lumber_Cartel.html http://come.to/the.lumber.cartel http://www.geocities.com/SiliconValley/Lakes/5362/cartel.html At their bases, both letters express the same beliefs: that every form of marketing has a "cost" to the recipient, and that spam's "costs" aren't as bad as those of unsolicited phone or postal mail marketing. A subsidiary assertion is that spam cuts down on the prevalence of other direct marketing forms. The second assertion is easy to dismiss. According to the Direct Marketing Association, ad expenditures for "traditional" direct marketing grew an average rate of seven percent during the period from 1995-2000, and are expected to continue to grow at about the same rate for the five years to come http://www.the-dma.org/library/publications/libres-ecoimpact2.shtml In short, email advertising has had no substantial effect on the prevalence of phone and postal marketing. But the first belief - that unsolicited email "costs" the recipient less than unsolicited phone and postal marketing - is worth examining. If one defines "cost" exclusively as "direct financial burden" then there's no contest: Spam costs more. In the U.S., there's generally no cost to receive a phone call (unless you're on a cell or satellite phone), and the sender pays for postal mail virtually everywhere in the world. On the other hand, a substantial number of Internet users still pay per-minute fees to pick up their mail, whether they're dialing in for mail from a dollar-a-minute hotel phone or a metered line in rural Missouri. http://www.earthlink.net/accessnumbers/toll http://www.cauce.org/tales/retrieve_mail.shtml http://www.ecofuture.org/jm/spam_cost.html But "cost" is not just about money. The person angry about unsolicited paper mail considers the "time cost" of carrying letters to the trash, the cost of paying the municipal garbage company to take the excess bulk, and the environmental cost of creating that much paper in the first place. One who hates phone solicitation perceives a cost in time, privacy, and "opportunity cost" (because others can't get through when a salesperson is on the line.) Arguments about spam's costs are starting to loom large in the legal arena. Often, courts assert the rights of Network Resource Owners to control their equipment, but are uncertain how NROs should be compensated for spammers' acts of trespass. As I see it, four types of cost should be considered in spam cases http://law.spamcon.org/us-cases/
In my opinion, the answer depends on the cost that the *sender* bears. You see, a high sender cost will naturally limit the amount of unproductive solicitation: Nobody's going to spend a million dollars to contact a million unqualified leads. On the other hand, they might well spend a hundred dollars. As a recent study by the European Union stated (Page 110): "The history of the advertising industry shows that the lower the cost of a direct marketing technique the greater the risk of abuse". That report discusses cost issues extensively, and is highly recommended http://europa.eu.int/comm/internal_market/en/dataprot/studies/spam.htm Unsolicited advertising by postal mail is expensive for the sender: It's not unusual for postage, paper, printing, creative services, tracking and fulfillment fees to come to over a dollar per contact. Phone solicitation is even more expensive - and less popular. By contrast, spam falls into the same sender cost category as unsolicited faxes and automated phone solicitation. Both of those marketing practices cost comparatively little (under $0.05 per contact), while spam costs a fraction of a penny per contact. Both unsolicited faxes and automated phone solicitation are forbidden by U.S. Federal law http://www.junkbusters.com/ht/en/fcc.html Let's assume that each of these contacts, regardless of method, costs the recipient a small fixed amount. A worker who is paid US$12.00 per hour would make US$0.10 in the 30 seconds it takes to hear the phone solicitor's pitch and say "no, thank you". Average in the lower recipient cost of paper mail and the high price of fax cartridges, and I think it's fair to say that unsolicited ads cost the recipient an average of a dime per contact in purely financial terms. That yields the following chart: COST COMPARISON OF UNSOLICITED MARKETING METHODS All cost figures per contact, estimated COST TO COST TO % OF COST BORNE FORM SENDER RECIPIENT BY SENDER - - - LEGAL Telemarketing $1.00 $0.10 91% Postal mail $0.75 $0.10 88% ILLEGAL Fax $0.03 $0.10 23% Automated phone $0.07 $0.10 41% OF UNCERTAIN LEGALITY Spam $0.00001 $0.10 0.01% Even if these figures are off by a factor of a hundred, the legitimacy of unsolicited email is clear. It has no place being lumped in with unsolicited postal and phone solicitations, in which the sender carries the bulk of the cost; rather, it belongs in the cesspool with currently illegal marketing practices. - Tom Geller is executive director of the SpamCon Foundation http://www.spamcon.org , a non-profit organization dedicated to protecting email as a medium of communications and commerce.
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