All the Spammers in the World Only Make $200 Million?

Discussion in 'In The News' started by roundabout, Aug 7, 2012.

  1. roundabout

    roundabout VIP

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    All the Spammers in the World May Only Make $200 Million a Year

    We all get a lot of spam. Just today, Gmail has neatly filed more than 100 messages into my Spam folder. When I look at the list of subjects, I wonder: How the hell could any of this actually make someone money?

    It's just weird: I understand annoyances like telemarketing where it's clear that some people buy things from people who call them at home. But spam? It just seems like a waste all around.

    Now, in a new paper in the Journal of Economic Perspectives, Justin Rao of Microsoft and David Reiley of Google (who met working at Yahoo) have teamed up to estimate the cost of spam to society relative to its worldwide revenues. The societal price tag comes to $20 billion. The revenue? A mere $200 million. As they note, that means that the "'externality ratio' of external costs to internal benefits for spam is around 100:1. Spammers are dumping a lot on society and reaping fairly little in return." In case it's not clear, this is a suboptimal situation.

    Many activities impose costs on society that are not "internalized" by the firms or individuals. Air and water pollution are the paradigmatic examples. You get to drive your car around emitting particulates and various other smog-causing molecules that increase the cost of treating asthma and other illnesses for other people by a tiny bit.

    Spam has a remarkably high externality ratio, not just relative to driving an automobile, but stealing one, too. Here's a chart that Rao and Reiley include in their paper, which just looks at the direct costs of spam to end users (which they estimate at $14-$18 billion):

    [​IMG]

    It is just so cheap to send spam and even if you only ensnare a tiny number of people, that's enough to make it worthwhile. Rao and Reiley estimate that only 1 in 25,000 people need somehow buy something through spam advertising to make it worthwhile.

    [​IMG]

    So what's the way forward? The researchers gloss a variety of techniques like "attention bonds," in which you'd be paid some tiny amount (say, $0.05) for reading unsolicited emails, and government interventions. But their preferred solution is to find ways to raise the cost of business for spammers, so that their campaigns become unprofitable.

    "We advocate supplementing current technological anti-spam efforts with lower-level economic interventions at key choke points in the spam supply chain, such as legal intervention in payment processing, or even spam-the-spammers tactics," they conclude. "By raising spam merchants' operating costs, such countermeasures could cause many campaigns no longer to be profitable at the current marginal price of $20-50 per million emails."

    Source:
    http://www.theatlantic.com/technolo...rld-may-only-make-200-million-a-year/260814/#
     
  2. jellyfish

    jellyfish VIP

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    Not sure where they put the cut off on what they call spam, I would assume they mean anything that isnt from your mother about a family get together on Sunday. That being said, I think they are mistaking lost productivity for engagement. Its would also be quite laughable to think that if someone is spending hours at work reading through emails that the next default for them to be using that time is actually working. Everyone knows the average workday goes something like this: Facebook -> espn -> pogo -> checking into email offer about how epic perfect tortilla is going to make taco tuesday.


    I just did a quick calculation of average engagement at $10 an hour for facebook and concluded that the externality of that is 280, so technically facebook is a greater evil to society than car jacking or spam. The atlantic probably wouldn't publish that article though.
     
  3. postmaster

    postmaster VIP

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    No matter how objective anti's try to be... Their data is ALWAYS skewed with their subjective slant.

    .
     
  4. monetize

    monetize VIP

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    How are they coming up with the $200 million number? I'm pretty sure "spammers" are NOT reporting their revenues. Unless they are categorizing companies who send regular emails as spammers, then I think that $200 million is a huge underestimation.
     
    Last edited: Aug 10, 2012
  5. DKPMO

    DKPMO VIP

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    They probably just took "average" eCPM of a "spam email" and multiplied it by "average" volume of "worldwide spam"

    This of course ignores the vast differentiation of list/content quality the therefore monetization across the board.
     
  6. Spounki

    Spounki VIP

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    Reading the full report (attached) they explain a bit more how they are making their calculations on botnet mailing, 80% of worldwide spam.

     

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