Cost of spam to reach $50 billion in 2005, Ferris study says

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By Carol Krol

Spam will cost an estimated $50 billion worldwide in lost productivity, information technology and help-desk costs in 2005, and the U.S. accounts for $17 billion of that total, according to "The Global Economic Impact of Spam, 2005," a recent report from Ferris Research.

That estimate marks a significant jump from the $10 million U.S. organizations lost in 2003. "This is yet another data point that shows spam is a huge problem," said Richi Jennings, lead analyst at Ferris Research. "The recipients of [marketers'] messages or the people who run e-mail systems for the recipients are very worried about it," he said. He said direct marketers continue to grapple with the problem, which is expected to worsen this year in terms of deliverability and false positives. That translates into increased costs all around.

"It's a problem for direct marketers, people who send out e-newsletters and anyone [else] who sends a large volume of [permission-based] content to the recipient," he said.

Costs for filtering spam vary widely depending on the method used, according to the study. Manually filtering spam currently costs a typical user about $718 per year; desktop filtering through anti-spam programs costs about $217 per user; and using spam solutions at the server level cost $132 per user, making it the most cost-efficient of the three approaches. "From a cost-benefit perspective these days, there's very little reason for companies to do desktop spam filtering," Jennings said. "That didn't used to be true, but it's true now."

However, the use of spam filters is expected to eventually reduce the volume of spam, which in turn reduces the cost of dealing with the problem, Jennings said. "If we can prevent a huge proportion of spam from actually getting delivered, the economic incentive to spam goes away," Jennings said.

More mailboxes are being protected by better spam filters, he said. Additionally, ISPs are increasingly thwarting spammers who hijack PCs with viruses that send spam for them through the consumer's computer. "That's all very tidy and simplistic but it's what the anti-spam industry is working towards."

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