The study, carried out by Gartner Group, reveals that junk e-mail is a significant cause of churn, the industry term for loss of customers. Unlike in the telecommunications industry, where consumers have few choices of provider, churn is a major influence on ISPs' revenues.
"From an ISP point of view, the financial impact of spam is extremely serious," said Jeff Magill, Brightlight vice president of marketing. "People get disgruntled with the ISP, because they feel it is not controlling spam for them, and they leave."
First spam/ISP study
Service providers have long pointed out the infrastructure costs of unwanted commercial e-mail, which costs next to nothing to send out, but which eats up ISPs' valuable bandwidth and storage space. The Brightlight study is the first to note the effects of spam on an ISP's business.
The study showed that seven percent of a company's churn rate is attributable to customers who are fed up with the spam they receive. That number sounds small, but for a hypothetical ISP with one million customers, it would amount to $7 million a year in lost revenues, or about three percent of the company's gross revenues.
In an industry increasingly being squeezed by competition and consolidation, on one hand, and the juggernaut of America Online Inc. on the other hand, that three percent could count for a lot.
Gartner's results, based on queries of 13,000 users, showed that consumers think their ISP is, or should be, at the root of all their spam problems.
The blame game
For example, asked how they thought spammers had harvested their addresses, 24 percent guessed it had been sold by their ISP. An overlapping 30 percent thought it had been revealed by a "cookie," a small data file stored by a Website on a user's local disk.
What's more, ISPs could easily be underestimating how annoyed their customers are with spam.
Gartner found that only 44 percent of those surveyed had actively complained about receiving spam, and only half of those people had complained directly to their ISP; that means ISPs are hearing from only about a quarter of those who dislike receiving spam.
"Most dissatisfied customers won't complain, they'll just leave," said Magill.
