Make Spammers Pay Before You Do

Last month, we asked you to weigh in with suggestions on how we, as an industry, can combat spam. We created an email alias for your suggestions (the first spam arrived fewer than 45 minutes after the address was published).

Response was strong (some of your feedback is posted here), though much of it was as well intentioned as it was ineffective in solving the common problem (“Great idea! Count me in!). We know fighting spam is a great idea. Our question was: How?

We don’t yet have a solution, but the problem seems more clearly defined. Spam costs businesses and consumers growing amounts of dollars, time, and other resources, both direct and indirect. Spammers’ financial disincentive is close to nil.

ClickZ’s position: The top priority in the battle against spam lies in reversing that financial imbalance.

Consider SpamCon founder Tom Geller’s estimate of who bears the costs of direct marketing. “Even if these figures are off by a factor of a hundred,” he notes, “the sender carries the bulk of the cost.” (See table.)

Cost Comparison of Unsolicited Marketing Methods*
Form Cost to Sender ($) Cost to Recipient ($) Cost Borne by Sender(%)

Telemarketing 1.00 0.10 91.00
Postal mail 0.75 0.10 88.00

Fax 0.03 0.10 23.00
Automated phone 0.07 0.10 41.00
Uncertain legality
Spam 0.00001 0.10 0.01
* All cost figures per contact are estimated.
Source: “SpamCon Foundation News,” Issue #0008, 7 August 2001.

Tom created that table well before spam took off as the Next Big (VC) Thing. Keeping pace with the proliferation of junk mail (698 UCE messages per user this year will grow to 1,400 by 2006, says Jupiter) are junk mail solutions. Spammers don’t pay for these. You do. Spam’s global cost, by one estimate, will exceed $100 million in three years’ time.

“It’s a no-brainer to me as an investment,” an angel investor told The Wall Street Journal about sinking funds into Cloudmark.”[Spam” has to be one of the largest problems in the world. Anytime you have something that large… it’s a killer investment.”

Companies promising to rid personal, corporate, and ISP systems of spam are proliferating and profiting: Brightmail; ChoiceMail;; Spamfire; SpamCop; Mailshell; Mailfilter; SkyScan AS; IronPort; Mail Deflector; Postini; SoftMailCheck; iHateSpam; Junk Spy;… are just a few of some 200 businesses. Today, it’s an $88 million dollar industry. In 2006, the antispam market is expected to grow to $181 million.

The solutions they offer come in every shape and size. They’re Web-based and software packages. Methodologies range from heuristics to blacklists and whitelists. Prices range from small monthly fees for consumers (an estimated 10 percent of their ISP fees go to combat spam) to major capital expenditure for businesses.

Spam’s profitable for the legal profession, too. EarthLink’s victory in a $25 million suit against a spammer last week marked another round in the lawsuits against spammers undertaken by virtually every major ISP and not a few email service vendors.

Spam revenues are even impacting SPAM. Hormel corporate communications chief Julie Craven told me, “Sales of SPAM merchandise are up significantly.” She says the company attributes the spike to the recent opening of the new SPAM Museum. Still, you gotta wonder how much of that momentum is driven by the lunchmeat versus the other kind of spam.

I’m not for a moment knocking the lawyers or programmers working to halt spam, and I fully recognize their need to be paid for their work. Still, something about the scenario bears an eerie resemblance to the multibillion dollar cold-and-flu remedy business or the pest-control industry. Are cold viruses and household vermin truly insoluble problems, or is the financial disincentive for solving them too great? (I’m not habitually a conspiracy theorist, but I did spend time recently with founder Richard Metzger.)

What’s the next step? Many of you suggested the formation of a governance body to develop and implement a fee structure for commercial emailers. Decent concept — but the details are of mind-boggling complexity. And, do you legitimate marketers want to be next in line to pony up fees because of the bad guys?

November’s beta release of Vanquish is eagerly anticipated. The service will levy recipient-triggered charges against senders of unsolicited email. Mailers put up a cash bond. Each time a spammer is “fined” by a user, the money is redistributed to ISPs and mail providers.

Another idea being advocated is leveraging paid search engine results against spammers. It’s kind of a brilliant concept, if time consuming.

A real solution won’t arrive without a dialogue. Your move again. Do you agree with ClickZ that financial disincentives for spammers should be priority one in the fight against spam? Got a better idea? Let us know.

Join us at ClickZ E-Mail Strategies in Chicago on Thursday, August 8.

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