Spam's Cost To Corporate America: $9 Billion Last Year

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Rebutting a recent finding that spam is not a drain on worker productivity, San Francisco-based market research company Ferris Research has estimated that unwanted commercial e-mail cost U.S. corporations $8.9 billion in 2002.

Ferris computed the cost of spam by calculating its costly effects in three areas: loss of worker productivity; consumption of bandwidth and other tech resources; and use of technical support time. The researcher found that productivity loss accounted for 40 percent of the drain.

“In the grand scheme of things, it’s a big drag,” said Marten Nelson, a research analyst at Ferris. “It’s about $10 per user per month. That’s a considerable cost.”

The finding stands in stark contrast to the conclusion of the Pew Internet & American Life Project, which found Internet users mostly unbothered by spam in the workplace . In a telephone poll of 2,500 adults, 71 percent said “little” of their work e-mail was spam. The survey’s authors said most of the alarmist talk about spam was generated by what it called “power e-mailers,” who make up a small percentage of the population. Pew concluded that the spam problem was mostly confined to personal e-mail accounts with the major free providers, like MSN’s Hotmail and Yahoo!.

Ferris agreed that spam is a greater problem for general e-mail accounts, but said that it remains a serious problem for corporate accounts too. The researcher figured spam accounts for 30 percent of all e-mail sent to U.S. Internet service providers. For corporate accounts, the researcher estimates spam makes up 15 to 20 percent of all e-mail.

The figures generally follow the recent findings of others in the industry. Brightmail, an anti-spam software maker, reported that spam will account for 40 percent of e-mail traffic in 2003.

Nelson said the average corporate e-mail user receives between three and four spam messages a day, wasting an average of 4.5 seconds on each message. Over time, he said these figures add up to considerable lost productivity, particularly when accidentally deleted e-mails are taken into account.

Meanwhile, user frustration is also on the rise. Last week, a Harris Poll found an overwhelming majority of respondents favoring a legal remedy to spam’s proliferation.

While spam is not unique to the U.S., Ferris found that it is more of a problem here than elsewhere. In Europe, Ferris pegged the cost of spam at $2.5 billion, while a bigger problem is the growing use of mobile messaging for unwanted commercial messages.

In fighting spam, Ferris points to four approaches: educating users; industry standards; legislation; and technological fixes. Of the four, the researcher concludes that technology, at this point, offers corporations the best defense.

Nelson said spam was quickly moving up the corporate chain from an IT problem to a productivity problem, mostly because of the nature of spam. Since top executives fit the profile of heavy e-mail users most likely to be affected by a large amount of spam, their attention is often focused on the problem.

“One of the challenges for most organizations is to find out what is really affected by spam,” he said.