The Economics of Spam
Excellent paper on the economics of spam. The authors infiltrated the Storm worm and monitored its doings.
After 26 days, and almost 350 million e-mail messages, only 28 sales resulted—a conversion rate of well under 0.00001%. Of these, all but one were for male-enhancement products and the average purchase price was close to $100. Taken together, these conversions would have resulted in revenues of $2,731.88—a bit over $100 a day for the measurement period or $140 per day for periods when the campaign was active. However, our study interposed on only a small fraction of the overall Storm network—we estimate roughly 1.5 percent based on the fraction of worker bots we proxy. Thus, the total daily revenue attributable to Storm’s pharmacy campaign is likely closer to $7000 (or $9500 during periods of campaign activity). By the same logic, we estimate that Storm self-propagation campaigns can produce between 3500 and 8500 new bots per day.
Under the assumption that our measurements are representative over time (an admittedly dangerous assumption when dealing with such small samples), we can extrapolate that, were it sent continuously at the same rate, Storm-generated pharmaceutical spam would produce roughly 3.5 million dollars of revenue in a year. This number could be even higher if spam-advertised pharmacies experience repeat business. A bit less than “millions of dollars every day,” but certainly a healthy enterprise.
Of course, the authors point out that it’s dangerous to make these sorts of generalizations:
We would be the first to admit that these results represent a single data point and are not necessarily representative of spam as a whole. Different campaigns, using different tactics and marketing different products will undoubtedly produce different outcomes. Indeed, we caution strongly against researchers using the conversion rates we have measured for these Storm-based campaigns to justify assumptions in any other context.
Spam is all about economics. When sending junk mail costs a dollar in paper, list rental, and postage, a marketer needs a reasonable conversion rate to make the campaign worthwhile. When sending junk mail is almost free, a one in ten million conversion rate is acceptable.
Albatross • November 12, 2008 7:20 AM
But when I suggest that after your first 100 e-mails a day, you be charged a penny an e-mail, everyone scoffs.
Fine, be that way. Spend your days deleting 200 spam an hour, safe in the knowledge that your 101’st e-mail of your day is still free.
BTW, who the HECK are the idiots who buy ANYTHING from spam? Particularly “male enlargement” products?