Spam Economics

Scott Trudeau wrote via his Google Reader shared items, as a note to a Ars Technica article about spam botnets:

Spam response rates are something like 0.00001% so you have to send a LOT of spam to make money.

The interesting part of that article:

If you’ve ever despaired of teaching your friends/family/coworkers not to open or respond to spam, the researchers’ findings might make your day. After sending some 350 million e-mail messages over 26 days, Savage and his team had “sold” just 28 “male enhancement” products for just under $100 each. This works out to a conversion rate that’s described as “well under” 0.00001 percent. Total revenue for the period would have been $2,731.88, a bit over $100 a day. That’s chump change by corporate standards, and it’s why the spam industry relies on truly massive campaigns the way it does. By the scientists’ estimates, they controlled just 1.5 percent of the total Storm network. Extrapolate their earnings against Storm’s actual size, and the botnet may have been raking in as much as $7,000 a day ($9,500 if we only count the days Storm was actively conducting a campaign). For the curious, that works out to some $3.5 million in revenue per year.

[…] it suggests that spammers may be extremely sensitive to costs—more so than was previously believed. Even a small increase in the cost of sending an e-mail, they postulate, could have significant ramifications for the botnet industry, and might slow the rate at which it grows or put some spam operations out of business altogether.

This is another interesting puzzle piece in understanding spam, along my earlier entry on How Spammers see themselve.

In summary: To fight spam, you have to understand spammers. They see themselve as doing “creative marketing”, just trying to make some dough. You can’t convince them that what they are doing is actually spam (ala “evil” in the form of costing millions, maybe billions), so you have to make sure that their margin falls below a threshold to actually be profitable.


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  1. I guess whis war can’t be won. You can’t beat the spammers because it’s a number’s game: if you manage to sort out more of the spam mails and the profit sinks, the spammers will just send out even more spam.
    Nevertheless, spam stinks.