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Re: Q on NYT article on the cost of Spam



on Mon, Jul 28, 2003 at 06:53:45AM -0700, Hugo Vanwoerkom (hvw59601@yahoo.com) wrote:
>> The question nobody(?) seems to answer is why spam at all: it has to
> be that doing it gets you money.  Can anybody answer that side of it?

You have to realize how cheap spam is to send. In the direct mail business, that is sending advertisements via snail mail, it typically only takes a 0.5% response rate for a mailing to be profitable. Once you have found a profitable offer to mail, and identified the kind of mailing lists that have the sort of recipients who are likely to respond, direct mail is a license to print money. This even considering the fact that a direct mail letter costs almost a dollar apiece to mail, to pay for the printing, mailing list rental, labor and postage.

When you consider that most spammers don't pay for bandwidth because they hijack open relays, you can understand that a response rate of as little as one in a million makes sending spam a worthwhile activity. I read recently that the Nigerian scam nets the all the scammers in the world a total of about $10 million per year. With a potential payoff in the millions of dollars paid to just one person, you can see how worthwhile it is to go to a lot of effort to identify those rare individuals who both have a lot of money (or the ability to embezzle it) and who are too stupid to know they are being duped.

(It's not hard for a spammer to find an open relay. I once received a spam advertising an inexpensive program that was a sort of open relay search engine. The program, which was bluntly advertised as a necessary tool for the production spammer, would scan the entire internet to look for relays that you can use to broadcast your spam.)

Keep in mind that there are lots of people who own computers but do not think critically enough to realize they're being ripped off. And there are lots of guys who are horny and ill-informed enough that they'll click the link in every porn spam they get. It is not rare for spam to advertise legitimate products, so that those who respond are benefitted by the transaction.

It doesn't bother the spammer that clueful folk set up spam filters - as long as there are people who are ill-informed, unintelligent, uneducated, lonely or irrational, it will be profitable to send spam. (I say lonely because I read once that the TV shopping channels sell a lot of stuff to lonely people. It gives them someone to talk to, when they call up to order a product.)

Thus it is important to understand that installing personal spam filters won't do anything to stop the spam from being sent. While filters _will_ prevent you from receiving spam, the people whose responses make business profitable for the spammers don't know if a mail filter is fit to eat. Filtering will only reduce the quantity of spam that's sent when a substantial fraction of the world's ISPs and mail hosting services have installed spam filters that are enabled by default. Spam is so costly to the big ISPs that I can imagine some will eventually install filters that cannot be disabled.

I posted a couple comments to Kuro5hin that explain the direct mail business in some detail. They will give you some idea of the challenge that spam presents, when you consider how much cheaper it is to send electronic rather than postal mail. I've been planning to write an article for the site that will discuss mass marketing at some length, but I don't expect to have the time to write it for a while:

The importance of advertising to business
http://www.kuro5hin.org/comments/2003/7/9/831/85518/55#55

Direct mail is very scientifically targeted
http://www.kuro5hin.org/comments/2003/7/9/831/85518/67#67

Ever Faithful,

Mike
--
Michael D. Crawford
GoingWare Inc. - Expert Software Development and Consulting
http://www.goingware.com
crawford@goingware.com

  Tilting at Windmills for a Better Tomorrow.

    "I give you this one rule of conduct. Do what you will, but speak
     out always. Be shunned, be hated, be ridiculed, be scared,
     be in doubt, but don't be gagged."
     -- John J. Chapman, "Make a Bonfire of Your Reputations"
        http://www.goingware.com/reputation/



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