Spam Costs Keep Rising For Business

Advisory firm Nucleus Research says it costs employers $1,934 per employee annually through loss of productivity.

InformationWeek Staff, Contributor

June 8, 2004

2 Min Read

Despite new laws and technologies, spam increasingly takes a toll on business coffers, costing employers $1,934 a year for each worker through loss of productivity, according to a study released Tuesday by Nucleus Research.

Nucleus, an advisory firm that specializes in return-on-investment research, considers its estimate conservative because it doesn't account for less-visible costs of spam, such as expenses related to IT personnel, software, hardware, and bandwidth hogged by spam. Also missing from its calculation: the negative impact of virus-triggered network outages on customer satisfaction or increased business exposure to harassment.

Though spam-filtering technologies have become more sophisticated, they haven't prevented workers from receiving more unwanted and unsolicited messages. On average, Nucleus says, users at companies with companywide spam filters received 20% less spam, suggesting ROI opportunities from the technologies. But last July, that figure stood at 26%.

All this is occurring nearly a half-year after Congress enacted the Can-Spam Act aimed at penalizing spammers and the introduction of enhanced spam-filtering tools. Nucleus contends that many IT administrators have shied away from configuring spam filters to more-aggressive levels because they fear legitimate E-mail may be blocked, too. "Filtering technologies are doing their best to lessen the impact and do deliver a clear ROI, but the exponential growth of spam limits their effectiveness," Rebecca Wettemann, VP of research of Nucleus Research, said in a statement accompanying the report.

Wettemann called on companies to lobby Congress to toughen existing anti-spamming laws to make it costly for spammers to send unsolicited messages.

Workers battling spam underestimate the cost it has on their employers. Respondents' estimates of the annual employee cost of spam to their employers ranged from $25 to $1,000, with an average of $220. That's way off the mark, Nucleus says, suggesting a gap between perception and reality.

Nucleus surveyed employees at 82 major companies in May and discovered they received on average more than twice as much spam a day--29 E-mails--than the 13 E-mails they received last July, when researchers last queried workers.

The researchers calculated productivity loss at 3.1% by estimating that users spent an average of 30 seconds to handle each spam message. To get the $1,934 figure, Nucleus multiplied 3.1% by 2,080 hours--52 40-hour weeks--at a labor cost of $30 an hour.

Last July, Nucleus estimated that spam cost companies $874 a year per employee, with an annual productivity loss of 1.4%.

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