Tutorials - HTML - Domain Names - Email - Web Hosting - Ecommerce - Business Plans - Affiliates - Home Business
Affordable Health Insurance - Web Business Software - About Us - Contact Us - Privacy - Links

The True Cost of Spam

Thousands of small business webmasters briefly lose their domain names at expiration, due to a simple lack of understanding about the roles of three key players in the drama: domain name registrars, web hosts and internet service providers. Fortunately for most, they learn quickly how to save their web site from oblivion by using the 30 day redemption period for expired domain names enforced by ICANN. One simple solution is to extend domain registration for the maximum ten years. The other solution is to treat domain registrar data as the critical business element it is.

Search the WHOIS database to see who your Registrar is on your business domain! Transfer your domain name to take advantage of our lower prices.

I Can't Remember Where I Purchased My Domain Name!

It wasn't until my third client had called asking how to regain control of her domain name that I realized that it was a common problem for small business webmasters to forget where they had registered their domains. WHOIS my registrar? Why didn't I get an email about renewal? Why did my site stop working today?

People rarely realize how important it is to keep their domain registrar notified of changes to their email address and and other contact information. The registrar will send renewal notifications to the email address last on file. For most domain owners, the only time they think about contacting a registrar is the day they reserve their domain name. If they move to a new city and get a new internet service provider, it doesn't occur to them that the old email address will change and that meeans that the registrar can no longer contact them through the previous address, or phone or fax as each of them change and we rarely notify the controller of our domain of those changes.

Sometimes the first indication a business owner will have that there is a problem is the day their web site stops working. If they failed to notify their domain registrar of changed email address, they may never have received their domain renewal notice. Since many registrars honor a 30 day "redemption period" allowing expired domains to be redeemed, it may be possible to save the registration within 30 days following expiration by contacting registrars during 30 day domain redemption periods.

The following URL leads to the Internet Corporation for Assigned Names and Numbers (AKA ICANN) discussing the grace period and redemption period rules it enforces.


300X300 Ad Space Left Side
By Tom Geller
Executive Director, SpamCon Foundation

I GET A LETTER EVERY ONCE IN A WHILE from someone asking about "postal spam" or "telephone spam". These letters are generally of two types:

  • "Spam's annoying, but what really bothers me is when marketers call at dinnertime."
  • "Spam's annoying, but paper junk mail kills trees and fills my REAL mailbox."
Sometimes these correspondents ask what they can do to stop postal and phone solicitations, in which case I refer them to Jason Catlett's amazingly thorough Junkbusters site http://www.junkbusters.com .

Just as often, they're angry that anyone would be upset by a little spam. After all, the argument goes, spam takes the place of those more-invasive forms of marketing. Phones must be answered; paper mail must be carted to the trash. But with spam all you have to do is "hit delete", right? (There was even a rumor that antispam activists were part of a secret "lumber cartel" to ensure that marketers would continue to send "tree-based" paper mail!)


At their bases, both letters express the same beliefs: that every form of marketing has a "cost" to the recipient, and that spam's "costs" aren't as bad as those of unsolicited phone or postal mail marketing. A subsidiary assertion is that spam cuts down on the prevalence of other direct marketing forms.

The second assertion is easy to dismiss. According to the Direct Marketing Association, ad expenditures for "traditional" direct marketing grew an average rate of seven percent during the period from 1995-2000, and are expected to continue to grow at about the same rate for the five years to come


In short, email advertising has had no substantial effect on the prevalence of phone and postal marketing.

But the first belief -- that unsolicited email "costs" the recipient less than unsolicited phone and postal marketing -- is worth examining.

If one defines "cost" exclusively as "direct financial burden" then there's no contest: Spam costs more. In the U.S., there's generally no cost to receive a phone call (unless you're on a cell or satellite phone), and the sender pays for postal mail virtually everywhere in the world. On the other hand, a substantial number of Internet users still pay per-minute fees to pick up their mail, whether they're dialing in for mail from a dollar-a-minute hotel phone or a metered line in rural Missouri.


But "cost" is not just about money. The person angry about unsolicited paper mail considers the "time cost" of carrying letters to the trash, the cost of paying the municipal garbage company to take the excess bulk, and the environmental cost of creating that much paper in the first place. One who hates phone solicitation perceives a cost in time, privacy, and "opportunity cost" (because others can't get through when a salesperson is on the line.)

Arguments about spam's costs are starting to loom large in the legal arena. Often, courts assert the rights of Network Resource Owners to control their equipment, but are uncertain how NROs should be compensated for spammers' acts of trespass. As I see it, four types of cost should be considered in spam cases http://law.spamcon.org/us-cases/
    Includes increased need for storage, bandwidth, CPUs, wear and tear, etc. While often mentioned, these costs are relatively minor. In the case of AOL vs. Prime Data Worldnet Systems Inc., the plaintiff claimed (and won) direct computer costs of 78/1000 of a penny per message http://legal.web.aol.com/decisions/dljunk/primereport.html
    Server-room space, cooling, electricity -- and the biggie, personnel to handle both the increased traffic and the inevitable complaints from customers. A 1999 study found that over 50 percent of people who complain about spam do so by involving their own ISP http://www.brightmail.com/pdfs/gartner_rebuilt.pdf
    • False positives (i.e., damage from blocking legitimate mail) due to the need for antispam filters
    • Damage to the network owner's reputation (for "allowing" spam in)
    • Customer attrition and subsequent acquisition
    • Lost opportunity. These are by far the biggest costs -- and are, unfortunately, impossible to quantify. The abovementioned 1999 study found, for example, that customer attrition due to spam costs $7 per member per year at large ISPs, but that figure was publicly debated by the owner of a small ISP
  • COSTS THAT HAVE NO DIRECT FINANCIAL REPERCUSSIONS For example, the loss of privacy and parental control that spam introduces. Such arguments wade in philosophies of civil rights -- a subject far too broad to discuss here.

So all forms of direct marketing impose some recipient cost. The question then becomes: how much cost can marketers reasonably expect the recipient to shoulder?

In my opinion, the answer depends on the cost that the *sender* bears. You see, a high sender cost will naturally limit the amount of unproductive solicitation: Nobody's going to spend a million dollars to contact a million unqualified leads. On the other hand, they might well spend a hundred dollars. As a recent study by the European Union stated (Page 110): "The history of the advertising industry shows that the lower the cost of a direct marketing technique the greater the risk of abuse". That report discusses cost issues extensively, and is highly recommended


Unsolicited advertising by postal mail is expensive for the sender: It's not unusual for postage, paper, printing, creative services, tracking and fulfillment fees to come to over a dollar per contact. Phone solicitation is even more expensive -- and less popular.

By contrast, spam falls into the same sender cost category as unsolicited faxes and automated phone solicitation. Both of those marketing practices cost comparatively little (under $0.05 per contact), while spam costs a fraction of a penny per contact. Both unsolicited faxes and automated phone solicitation are forbidden by U.S. Federal law http://www.junkbusters.com/ht/en/fcc.html

Let's assume that each of these contacts, regardless of method, costs the recipient a small fixed amount. A worker who is paid US$12.00 per hour would make US$0.10 in the 30 seconds it takes to hear the phone solicitor's pitch and say "no, thank you". Average in the lower recipient cost of paper mail and the high price of fax cartridges, and I think it's fair to say that unsolicited ads cost the recipient an average of a dime per contact in purely financial terms.

That yields the following chart:

All cost figures per contact, estimated

                   COST TO     COST TO     % OF COST BORNE
   FORM            SENDER      RECIPIENT     BY SENDER
   ----            ------      ---------     ----------

   Telemarketing    $1.00        $0.10           91%
   Postal mail      $0.75        $0.10           88%

   Fax              $0.03        $0.10           23%
   Automated phone  $0.07        $0.10           41%

   Spam          $0.00001        $0.10         0.01%

Even if these figures are off by a factor of a hundred, the legitimacy of unsolicited email is clear. It has no place being lumped in with unsolicited postal and phone solicitations, in which the sender carries the bulk of the cost; rather, it belongs in the cesspool with currently illegal marketing practices.

-- Tom Geller is executive director of the SpamCon Foundation http://www.spamcon.org , a non-profit organization dedicated to protecting email as a medium of communications and commerce.

Return to Spam Tutorial Index of Articles


HTML Tutorial | CGI tutorial | Email Tutorial |
Spam Tutorial | Cookies Tutorial | Privacy Tutorial | Windows Tutorial | DreamWeaver Tutorial | Domain Name Tutorial | Business Plan Tutorial | Search Position Tutorial | Online Advertising Tutorial | Ecommerce Essentials Tutorial


Check to see if YOUR Domain Name is available by typing it into the search box directly below (choose from .com, .net, .org, .info, biz and .us domains). There is no charge to check availability of domains, but if you decide to purchase your domain name now, our pricing starts at only $7.95 - The lowest price you'll find for single year registrations! Compare our prices here! or you can Search the WHOIS database to see who owns any domain! If you want to transfer to take advantage of our lower prices, transfer your domain name.


Web WebSite101.com
**FED UP With Email Harvesting SpamBots?**

Here's a free CGI Script that removes your email address from your web site, yet still allows visitors to your site to email you!
Free Download here

Tutorials - HTML - Domain Names - Email - Web Hosting - Ecommerce - Business Plans - Affiliates - Home Business
Affordable Health Insurance - Web Business Software - About Us - Contact Us - Privacy - Links