Spam a nuisance, but does it really cost billions?

While unsolicited e-mails are certainly an annoyance, opinion is divided as to their actual impact on a company’s bottom line.

While some say the financial damage caused by spam is huge, others are sceptical at the numbers being trotted out.

For instance, a recent survey by the University of Maryland’s Robert H. Smith School of Business said loss of productivity due to spam costs U.S. businesses nearly US$ 22 billion a year.

At least one Canadian expert believes that’s a gross exaggeration.

Neil Schwartzman, president of the Coalition Against Unsolicited Commercial E-mail (CAUCE) Canada in Montreal, said the US$22 billion figure seems too large to be taken seriously. While not having seen the details of the study, Schwarztman suspects it suffers from the same methodological flaws that other “loss of productivity due to Spam e-mail” studies have.

Schwartzman is a member of the government of Canada’s taskforce charged with developing strategies to combat Spam e-mails.

The big mistake, he says, is taking a small sample size and projecting that out to create a figure that encompasses the whole of society or thousands of businesses.

He said its tantamount to assuming that because a single desktop in a company gets 50 junk e-mails a day, all the other computers in the firm get the same volume of spam and each person spends the same amount of time tackling the problem.

“It is just bad science,” he said. “I’ve been in this game for over a decade and I’ve seen many of these studies, and frankly I’m sick of hearing them. I can tell you that the task force on Spam on which I am a member is looking into getting some statistics that are not as skewed and saner.”

Matthew Prince, CEO of Unspam LLC in Chicago agreed the US$ 22 billion figure seems too high to be credible and suggested e-mail spam’s cost is more intangible than monetary.

“People feel like they are being invaded and how do you put a price on that,” Prince said. “I don’t think we will have an extra billion dollars to spend if we stop Spam. I think (such US$ 22 billion) figures miss the less quantifiable point which is this invasion of privacy.”

Not that Prince totally dismisses the monetary cost tackling spam. He notes that major Internet service provides (ISP) like AOL spend millions on developing anti-spam filters and solutions to reduce the number of unwanted e-mail getting to customers. There is a growing business of third-party solutions providers who do nothing but remove e-mail Spam from the e-mail traffic going across an ISP’s network.

The problem is that many smaller ISPs find it increasingly expensive to tackle the huge volumes of e-mail spam coming across their networks.

Tom Copeland, chairman of the Canadian Association of Internet Providers in Ottawa and president of, an IPS in Cobourg, Ont., said ISP companies like his have to spend increasing amounts of time and money to deal with Spam. In’s case, he said, it was the equivalent of a month’s salary for a full time employee — between $2,000 to $2,500.

“I outsourced the filtering,” Copeland added. “We chose outsourcing because it was just becoming a horrendous staff nightmare to try to stay one step ahead of the Spammers. One way or another, it is costing Canadians millions of dollars a month.”