Why Spamming is so Profitable

For a long time I have wondered why email spammers even make the effort with their untargeted and mass mailouts offering all sorts of ‘enticing’ products and services; surely all the offers from scantily clad ladies or the promise of longer lasting sex will be a sure sell! Alas for the spammers, my email filters protect me from the vast majority of spam I receive and I don’t open any spam but rather send it to the ‘junk mail’ folder upon receipt. So why does spam continue to grow and why do the spammers bother to send 3 billion emails per day?

Spam is all down to a numbers game! Three in every million spam emails sent solicits the desired action. O.k. so that’s only 0.0003% but this means that 9,000 spam emails get their desired response each day (i.e. 3 billion sent and getting a 0.0003% ‘return’). Let’s say that each of these 9,000 responses is worth only $20 each (I don’t know what the true figure is but I expect it would be a lot higher than this). Spam is therefore generating at least $180,000 per day for the spammers.

So, we now know the minimum amount the spammers earn per day but we still need to subtract what their spamming activities cost them to find out the profitability of our local spammer. Spamming is a very high margin game and much of the cost is fixed i.e. the more spam emails sent, the cheaper each email becomes to send. The software and hosting required in sending millions of emails daily is extremely inexpensive. I managed to locate some software that could be programmed to send emails through multiple SMTP providers and the rate and volume sent through each SMTP provider could be managed … all for under $150 per year. With this software, the spammer can create multiple emails from templates and use multiple sending lists to send through free email hosts such as Hotmail, Yahoo etc. This is just one bit of software but there are companies that provide mass email sending for very attractive prices. Email lists too can be purchased easily online for less than $1,000 for 10 million email addresses.

So, let’s figure out, using our known and estimated numbers, whether spamming is financially viable:

Many assumptions are made in the table above however the numbers speak for themselves. Spammers are profiting by at least $65 million per year. And spammers are encouraged to send as many spam emails as they can as sheer volume means more money for each spammer. It’s an unethical practice but the economics speak for themselves! And the risks involved are very low!

There have been numerous attempts to stop spam however only some have been even partially successful. With some spammers likely earning several million dollars per year some difficult to enforce laws aren’t going to stop them. Many years back Bill gates (of Microsoft) recommended a small cost per email sent. This recommendation never took off for numerous reasons however this would have made spamming far less profitable.