Researchers recreate spam campaign to estimate spam revenue

Spam is without doubt one of the most annoying and dangerous negative sides of the Internet. However, if you begin looking into spam, the people behind it, the mechanisms, the technology and the economics it is also a fascinating component of a cat-and-mouse game we play in our email inboxes every day. Researchers from UC Berkeley dug deeper into researching the background of spammers and published the most comprehensive paper on the likely profit we are aware of. We admit that the result surprised us and we are sure you will be surprised as well.

The paper ???Spamalytics: An Empirical Analysis of Spam Marketing Conversion ??? released by seven researchers from UC Berkeley and UC San Diego describes three carefully crafted spam campaigns hitting users around the world on all the major email hosting services. The campaigns were carried out over the Storm botnet and included about 470 million messages ??“ 350 million advertising pharmaceutical a product, 84 million in a postcard campaign and 40 million in a April Fools campaign.

It does not take much to figure out that many of those emails were caught by spam filters and most users would delete emails anyway, if they do not know a sender and see a subject line that looks suspicious. But then we also know that spam is a business, a generally believed very profitable business. But how profitable? And how many recipients of those emails open those emails, react to them and actually purchase a product?

In short, possibly very few. The researchers found that those 350 million emails promoting a pharmaceutical product resulted in 10,522 users (bots excluded) clicking through to the advertised website. 28 of them tried to purchase the product (which did not exist and resulted in an error message.) Those 10,522 came from all over the planet and there was no hint of people in certain geographies being more receptive to spam than others. The conversion rates in the other two campaigns were much higher ??“ the postcard campaign brought 3827 click-throughs and 316 conversions, while the April Fools campaign delivered a click-through rate of 2721 and 225 direct conversions.

The theoretical revenue in the pharmaceutical campaign was $2731.88, which is not really impressive for 350 million emails. But that is really only half the story. In the end, there were only 350 million emails, which is very low by any standard ??“ even traditional email harvester applications are currently able to detect about 5000 to 10,000 emails per minute. Imagine what a network of computers is capable of. And we know that about 120 billion spam messages are being sent each day. With that in mind, the researchers estimated that a similar campaign run across the Storm network should generate about $7000 - $9500 of revenue per day. Storm-generated pharmaceutical spam therefore could produce roughly $3.5 million of revenue in a year.

That may sound much, but ignores the fact that even spammers have to pay to send spam. There are substantial expenses and it is generally assumed that it costs about $80 to send 1 million spam messages. If that is true, then a campaign as laid out by the researchers would not even be close to be turning in a profit. Just to break even, the described campaign would need to be ten times cheaper ??“ or about $7.80 per million ??“ and we are not even talking about product cost and profit margins.

There is not much we know about the profit margins of spam, but common sense suggests that spam is profitable one way or the other. And if that is the case, the UC Berkeley/ UCSD study may provide technical background, but remains in the dark when it comes to actual conversion rates and profitability of this business.

Source: TG Daily

Tags: Internet, spam

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