Economics of spam

There was a discussion on Slack about the economics of email. It’s probably not a surprise that I have opinions (Who owns the inbox? Ownership of the Inbox). There was a discussion about this that was useful enough I’d share it.

Participants:

  • Laura: Laura Atkins (me!)
  • Steve: Steve Atkins (other half of WttW)
  • Matt V: Director Privacy @ 250ok

Laura: Direct mail to your home the owner of the channel is paid (in the US, the USPS is the owner of your mailbox). The economics of email are different, even when I’m leasing a mailbox, say from Gmail, that mailbox is owned by Google, not the person using it as a marketing channel. Senders only pay half the transaction costs, receivers pay substantially to handle incoming email.

One of the initial drives for filtering was to stop spammers from costing the receivers so much money. Very early on some ISP users had to pay per email to/from the internet (I think that was compuserv?) so every unsolicited message had to be paid for by the recipient. (There was some pay per email at AOL early on, too, I think).

But ISPs had to increase capacity and make significant investments in hardware to cope with the unsolicited email. Handling spam costs them real money, too. All of this lead to the ISP end of the industry basically saying they’d only accept mail from opt-in senders. “We’re happy to deliver mail that recipients have asked for.”

We have expanded “opt-in” to “wanted” and “relevant” because we can measure those things better than we could previously. But marketers don’t own the email channel. At best they own half of it. Once the message touches the recipient MX, the sender isn’t paying for it. The receiver – the ISP or the end user – is.

Goodmail tried to actually make the senders pay for the channel. And they failed in part because the majority of their customers were spammers and the ISPs decided the amount of money that Goodmail was paying them to accept the mail wasn’t paying for the loss of customers.

Bonded Sender (the product that eventually became Return Path Certified) also tried to flip the economic model. You could get certified and if the mail you were sending was spam, then you would forfeit a bond to the companies you spammed.

Habeas tried a different economic model and that didn’t work, either.

Matt V: especially since spammers tend to steal the delivery resources from people as well, so they have a near zero cost and any purchase/transaction/infection/etc… is upside to the the economics of spam are crazy, and that is a good portion of why it is so problematic.

Laura: You can, of course, pay to get to the inbox. Both Verizon Media and Google will let you buy advertising that looks exactly like email. It’s not email, it’s a display ad, but it looks like email.

Steve: “Because infected windows machines are almost free.” is the counterargument to a lot of “we could reduce spam if…” proposals.

Laura: Intrusiveness is another issue, but in this case I’m actually speaking only and directly about the economics and who owns an email box. There are a lot of different answers, depending on how you measure, but “marketers” is never the right answer.

Matt V: also very few people talk about the inbox without filtering and how unusable it would be… email would die quickly if all the filtering were turned off

Laura: Very few people have an unfiltered email box. Even I don’t, although we have a whole lot less filtering than many places for reasons.

Steve: Yeah. Aggressive spam filters are the only thing keeping email marketing – amongst other things – a viable business.

Laura: But I can’t read mail on my phone in the morning if my laptop has been shut down over night. There’s just too much spam to go through. I’ve got to let the filters built into mail.app do it’s thing and then go through and still manually delete between 20 and 50 messages.

Overall, we’re in a position where even in the face of free webmail providers, someone is paying for the inbox. In no cases are email senders covering the cost of their email to the recipient / recipient ISP. This is fine and good. We’ve all opted in to mail we want and enjoy and like. But it’s disingenuous to pretend that email is a channel like bill boards or television or magazine or even direct mail. The economics are just too different.


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