As I was researching into the business-idea of lead generation, I came across many articles about spam and how closely tied it is to the lead generation market. The concept of the spam industry was actually pretty foreign to me, which is what inspired this post to find out more and tell you why spam is seeing no signs of receding.
Well, one thing is obvious, spam is profitable, very profitable, ridiculously profitable. The simple logic is, why would there be so much spam if no one is making any money from them? But let me just give you an idea of the mind-blowing profitability of spam that I found out through my research.
Direct Sales of a Lousy Product
The most obvious route for money-making from spam is the direct sale of a lousy/cheap product. You see it all the time in spam advertising some strange medication or mortgage plan. Gullible people who fall for this will either receive a product whose effects and benefits are highly doubtful or they will not receive anything at all (which is the better scenario in my opinion). Now imagine a spammer sending out 100 million spam (not too difficult) mail for a product that sells for $20, and let’s say a conservative 1 in 10,000 people fall for the trick and make a purchase. That makes an easy staggering $200,000 for the spammer.
In 2005, a spam king, Jeremy Jaynes was imprisoned for 9 years for running an operation that earned him $750,000 per month and a total of $24 million before he was caught. He simply sent 10 million spam each day selling ‘make money from home opportunities’ and fake services and he gets about 15,000 orders a month of about $40 each. Incredible, not so much that he makes so much money doing so minimal work, but rather that there are 15,000 naïve people each month who fall into his trap.
Conspiring with Lead Generation Companies
In addition, spammers can choose to sell the information that people have entered as sales leads direct to companies (less likely) or lead generation companies. Lead generation companies act basically like a middleman between the spammers and the company actually selling the product. Thus, spammers will likely form partnerships with lead generation companies to supply them with gullible leads who respond to their spam, in return for a fixed commission for each lead.
These lead generation companies will then in turn sell these leads to legitimate companies seriously looking for customers for their products. Furthermore, this process also alienates these legitimate companies from the unsavoury practices of spammers. Each lead that is sold can range from a few dollars up to tens of dollars. Thus, it is not hard to see how profitable this source of revenue can be for all parties involved from spammers to lead generation companies.
Another source of revenue from spam is simply through ads placed on a webpage. Spammers will simply put the links of the page on the garbage that they flood people’s mailboxes with, and when people click on those links, they will be presented with a page full of ads. Deliberately or accidentally clicking on any of those ads will put money into the pockets of the spammers.
Thus, the continued growth of spam is simply a very basic principle of economics: supply and demand. Spamming works simply because of the stupidity of people. That’s all there is to it. Gullible people supply the demand and spammers are all too happy to cover the supply. Remove the demand and spammers will have no reason to exist. It is just like the continued rise of pirated software and movies. There is so much money to be made from pirated products and while consumers know that it is wrong, the easy access (for some) to these products and the huge savings involved creates an insatiable demand. Just like spammers, pirates are lured into their trade by the huge demand.
So what is the outlook of the spam industry likely to be? I am hoping that as internet users become more saavy on the web, they will wise up to the tactics of these scammers. This is part of the idea of this article, which is to expose the insidious activities of spammers and the roles that we, as internet users play in contributing to the overflowing coffers of these irritating pests (I am probably guilty of clicking on 1 or 2 spam emails, so I am counting myself as one of those foolish people.).
Optimistically, spam campaigns will become increasingly less effective as people learn how to tune out these enticing messages and stop responding on any level. But we can also be sure that spammers are not sitting back and waiting for us to become smarter, they are also inventing new ways of infiltrating our defence and presenting their garbage in increasingly alluring manner to encourage that single innocent click. The race is on and unfortunately, I do not see an obvious winner yet, which means that spammers are here to stay at least in the near future.
Nevertheless, it is undeniable that these fortune-seeking people (they do not deserve the term entrepreneurial) have found a very profitable niche in online business. The internet is all about volume. Unlike brick and motar businesses, internet businesses can make exceedingly more money due to the ease of reaching a much larger audience in an extremely short period of time and spamming is one of the means to this end. But, as with any success story, there are a few fundamental principles that we as online entrepreneurs can be reminded of from spam: The internet is all about volume. Get your message out to enough people and the money will start rolling in. Supply always follows demand. There are more gullible people on the web than we think.