Spam Costs Billions

The cost of spam in terms of lost productivity has reached $21.58 billion annually.

Thomas Claburn, Editor at Large, Enterprise Mobility

February 3, 2005

2 Min Read

The cost of spam in terms of lost productivity has reached $21.58 billion annually, according to the 2004 National Technology Readiness Survey.

The annual survey, conducted by Center for Excellence in Service at the University of Maryland's Robert H. Smith School of Business and Rockbridge Associates, a technology research firm, reveals that Internet users in the United States spend an average of three minutes deleting spam each day they use E-mail. Multiplied across 169.4 million online adults in the United States, this comes to 22.9 million hours a week, or $21.58 billion based on an average wage.

"The business community needs to realize that a lot of its money is going down the drain," says Roland Rust, director of the Center for Excellence in Service. "This is a problem that concerns everyone."

The survey indicates that 78% of online adults receive spam daily and 11% receive at least 40 such messages. Of those, 14% read spam they receive. Four percent of online adults said in the past year they purchased a product or service advertised in spam--that's almost 7 million people propping up peddlers of herbal Viagra and the like.

"They're the ones that cause the problem," Rust says.

An enviable 22% of online adults say they tend to get no spam whatsoever.

Messaging market-research firm Ferris Research expects to reveal similar, if slightly lower, figures soon. Analyst Richi Jennings projects the cost of spam in 2005 will come to $17 billion in the United States and $50 billion worldwide. These figures reflect the productivity loss to the diminishing number of business users without spam filters, the cost to purchase and administer anti-spam systems, and time wasted dealing with spam that gets through and with legitimate messages that have been misidentified as spam.

While spam volume has increased tenfold since 2003, its estimated economic impact hasn't even doubled--it was $11 billion in the United States in 2003, Jennings says. "Anti-spam technology is doing well," he says.

In a recent Weblog entry, he noted that some anti-spam vendors have suggested that spam volume is leveling off. He says that's a misapprehension that comes from measuring spam as a percentage of all E-mail--70% to 85% of E-mail today is said to be spam. The volume of spam appears to be leveling off because trying to graph this information over time results in a line that curves as it approaches, but never reaches, 100%.

But, as Jennings points out, this asymptotic plateau is an illusion of mathematics. Graph the number of spam messages from 2003 to 2005 and you get a line that rises steadily. "Far from slowing down," he writes, "the volume of spam continues to grow at a fairly consistent rate."

About the Author(s)

Thomas Claburn

Editor at Large, Enterprise Mobility

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful master's degree in film production. He wrote the original treatment for 3DO's Killing Time, a short story that appeared in On Spec, and the screenplay for an independent film called The Hanged Man, which he would later direct. He's the author of a science fiction novel, Reflecting Fires, and a sadly neglected blog, Lot 49. His iPhone game, Blocfall, is available through the iTunes App Store. His wife is a talented jazz singer; he does not sing, which is for the best.

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