2009 National Technology Readiness Survey
SPAM Report

Prepared by:
Rockbridge Associates, Inc.

Sponsored by:

Highlights on Spam from the 2009 National Technology Readiness Survey

  • The economic impact from time wasted deleting spam is estimated to be $21.6 billion a year, the same as in 2004
  • Taking into account inflation, the economic cost of deleting spam is 12 percent less than five years ago
  • Online consumers receive a median number of 5 spam emails a day, the same as in 2004
  • Eleven percent of those who receive spam will actually read it to see what it says
  • In 2004, four percent of online consumers who received spam had purchased something advertised in spam emails over a 12 month period, but in 2009, nobody was purchasing from spam
  • Consumers delete spam more frequently in 2009, with 59 percent deleting it at least 4 times a week compared to only 40 percent in 2004
  • Consumers spend less time deleting spam in a typical day, with the average time being 1.4 minutes in 2009 compared to 2.8 minutes in 2004
  • Only a third (37 percent) of online consumers have software or a service to filter spam email, and most of those who have such services have not paid anything for them in the past 12 months
  • Consumer spending on spam filtering systems is $2.1 billion a year, much less than the value of waste from deleting spam.

Introduction

Since 1999, the National Technology Readiness Survey (NTRS) has tracked beliefs about technology and key behaviors related to the Internet and e-services. It includes measures of consumer technology readiness and identifies emerging trends in commerce and society. The study is administered by Rockbridge Associates, Inc., a technology research firm, and is sponsored by the Center for Excellence in Service at the University of Maryland's Robert H. Smith School of Business.

The NTRS is based on a random sample of U.S. adults (18 years or older) and is administered by telephone. This report on the cost of SPAM covers two waves with identical questions that are five years apart:

  • 2004 NTRS - 1,000 adults surveyed in November, margin of error +/- 3 percentage points
  • 2009 NTRS - 600 adults surveyed January to June 2009, margin of error +/- 4 percentage points.

Spam on the Internet: How a Few Wasted Minutes Add Up

Widely considered the scourge of the online world, spam is a routine annoyance, if not a carrier of harmful computer viruses. The 2004 NTRS quantified the economic cost of spam to be almost $22 billion, which was the cost of the aggregate time spent deleting it. The 2009 NTRS provides a picture of how this has changed five years later when there is greater access to solutions that control spam. Defined in this study as "unsolicited e-mail from someone you do not know and is typically sent to several e-mail addresses simultaneously," only one out of ten (11 percent) online adults does not receive spam e-mail on a daily basis (see Figure 1). In 2004, twice as many adults (22 percent) were not bothered by spam daily. Fully one-third (38 percent) receive 10 or more spam e-mails a day, which is similar to five years ago (36 percent). After five years, more online users than ever are plagued by daily spam.

Cost of Spam

For a minority of adults, spam is not necessarily dismissed out of hand, but has the potential to pique their interest. Of those online adults who receive spam, 11 percent will open it to see what it says, as opposed to strictly checking to see if it is something they should delete (see Figure 2). The incidence of reading spam is only slightly less than in 2004 when it was 14 percent.

What has changed over five years is the willingness to actually purchase from spam. In 2009, nobody has made a purchase from spam over a 12 month period. However, in 2004, 4 percent of online adults who received spam purchased something as a result of seeing the product or service advertised in a spam e-mail. The spam marketplace has dried up. Unless the spam is used for a non-economic purpose such as championing a cause, there appears to be no benefit to trying to market products and services through this medium.

Cost of Spam

A major factor that affects the cost of spam to society is the frequency with which consumers delete spam. Over the past five years, the trend has been for online users to need to delete spam more frequently, although they spend less time in a typical day on the task. In 2009, 59 percent of online adults delete spam at least four times a week, including 38 percent who do this every single day and 21 percent who do this five to six times a week (see Figure 3). The frequency has grown substantially since 2004 when only 40 percent deleted spam at least four to six times a week (27 percent daily and 13 percent four to six times a week).

While there is a need to delete spam more often, less time is spent on the task. In a typical day, only 16 percent of online consumers spend more than a minute deleting spam, compared to 37 percent five years ago (see Figure 3). The average time spent in a typical day deleting spam is one-half of what it was in 2004. There could be many reasons for these changes. One may be that spam filtering technology is more prevalent and more sophisticated, so that consumers spend less time examining spam emails to ensure they are not accidentally deleting something of value. Consumers may also go online more frequently, and reading and managing email may be easier due to improved internet access such as high speed connections. From the consumer perspective, the raw volume of spam is not a factor because the median number of spam emails received daily, 5, has not changed from 2004 to 2009 (see Figure 1).

Cost of Spam

What is the cost of spam? When aggregated across the 195 million1 online adults in the United States, the time and cost wasted from deleting spam is substantial: 2.

  • The average online user spends 5.6 minutes per week deleting spam, compared to 8.1 in 20043.
  • Each week, online users waste over 18.1 million hours, compared to 22.9 million hours in 2004.
  • The lost time translates into 453,000 jobs (based on a 40-hour work week), compared to 573,000 jobs in 2004.
  • When this wasted time is valued at the average U.S. wage it amounts to $21.6 billion per year, about the same as in 2004. Taking into account inflation, the annual economic cost of spam has decreased by 12 percent in five years. The good news is that a range of factors have diminished the impact of spam, but the economic value in terms of wasted time is still substantial.

The analysis reveals countervailing trends over the past five years that have resulted in a lack of change in the cost of spam. On the one hand, consumers delete spam more often. In addition, the number of online users in the U.S. who could be affected by spam has grown due to natural population growth and a higher incidence of online users, and the wage base used to calculate the cost of spam is higher. These factors that contribute to an increase are mitigated by the fact that consumers spend less time cleaning up spam in a typical week.

Most of the time spent deleting spam is conducted outside of work. Among those who receive spam, the average share of time spent deleting spam at work is 9 percent. Not everyone works, but the share of time spent at work is low even among those with internet access at work (15 percent)4. This could indicate that work email systems are more effective in filtering spam. Another factor may be that consumers' work identities are more anonymous and less likely to be on spam lists.

Consumers do not make widespread use of spam filtering technology at home. Barely a third (37 percent) of online adults use software or a service that filters spam5. Of those who use such systems, two out of three (64 percent) have not paid for purchasing or licensing software or filtering services in the past year6. These consumers may be using internet service providers who provide spam filtering for free, or are using free software or software that they paid for more than a year ago.

If consumers pay anything for spam filtering, the median expenditure is $59 in a year, meaning half pay at or below this amount and half pay at or above this amount. Taking into account the reported expenditures per consumer, the total annual expenses for spam filtering software and services for personal use is estimated to be $2.1 Billion7. This number is small compared to the cost of time wasted deleting spam for personal purposes. The value of wasted personal time is 10 times this amount8, implying there is a latent need for consumers to pay for spam filtering products and services given the cost of personal time wasted.

Implications: The Center for Excellence in Services and Rockbridge first quantified the cost of spam in 2004 and found it to be significant. Five years later, spam still costs the economy $22 billion in wasted time. Though substantial, the impact is less by about 12 percent (taking into account inflation). Many factors may have contributed to this reduction. Given that a small share of the time deleting spam is at work, workplace spam filtering systems introduced over the past five years may have contributed to controlling spam. Greater ease of use of email, due partly to improvements in access speed, may have helped consumers clean up spam more quickly.

A relatively small share of internet users is aware of any kind of software or service to control spam on their personal email. The annual spending on such systems is far less than the wasted time deleting spam. If internet users valued their time at the average wage of $918 per week, they would as a group fare better by paying much more for spam control.

While the impact of spam has not changed dramatically in the past five years, in the future, it will begin to pervade new avenues of communication. Online access is becoming increasingly mobile, and spam is taking on a new dimension by annoying users of portable devices. To the extent new digital services have usage fees, spam will result in additional costs besides their loss of time. Other types of spam are creeping into networks as well, including unsolicited text messages.

For marketers, it is clear that spam does not pay. Reputable organizations are learning to creatively master inbound and outbound internet marketing through ethical and legal methods, including search engine optimization (SEO), email marketing with opt-in lists, and online advertising. Nobody is purchasing from email advertising viewed as spam.

Cost of Spam

_____________________________

1The U.S. Bureau of the Census estimates there are 232 million adults age 18 or older, and 84 percent of adults in the 2009 NTRS report having been online at home, work or another location.
2See Appendix for calculations.
3Calculated by combining responses to survey questions about frequency and length of time.
4What percentage of the time would you say you delete SPAM at your job or business, and what percentage of the time do you do this away from work on your own time?
5At home, do you use software or a service that filters SPAM? 37 percent say "yes," 60 percent say "no" and 3 percent are not sure.
6In the past 12 months, approximately how much money have you spent on software and filtering services?
7194.9 M online users x 37 percent who use services or products x 35 percent who pay > $0 x mean annual expenditure of $81.35.
8$21.63 Billion x 91 percent of time that is personal = $19.7 Billion.

 

About the Book | The Authors | How the TRI was developed | The Technology Readiness Index | Test your TR | Tech Segments
Techno-Ready Marketing Audit | The NTRS | Presentations | Articles and Papers | Case Studies | Tech Research Services
Home | Contact Us | Site Map
Copyright © 2009 Techno Ready Marketing. All Rights Reserved.