Russell Davies: The drug economy and the ad industry both rely on spam

By Russell Davies, campaignlive.co.uk, Thursday, 19 July 2012 08:00AM

There are two sorts of spam. There's the sort you get from robots and the sort you get from PR people - the first being way more imaginative and interesting than the second. They both rely on the peculiar economics of e-mail - that there's no economic penalty in sending mail to someone who doesn't want it. It relies on attrition and the laws of large numbers: you only need a tiny, tiny fraction of the mails you send to get clicked on and you've got a return on your investment.

Russell Davies: The drug economy and the ad industry both rely on spam

That's why I get so many press releases about things I'll never write about. It's not worth anyone's time to check if I'm likely to write about them, or whether I've ever written about anything sent to me in a press release (I've not) - it's economically sensible to just send them. My own little attempt to rebalance the penalties and economics is to automatically forward anything containing the word "embargo" to a public Posterous account, but that's mostly for my own perverse pleasure.

There's probably more to learn from robot spam - it's the future of advertising, red in tooth and claw - and if you Google "Rogue Pharmacy Economics 101", you'll find a blog post that gives you a fascinating glimpse into how the spam-advertised drug economy works.

The market has two essential components. There are back-room, logistical operations known by the Russian name of partnerka. They supply the pills, handle the fulfilment and the credit card processing and make most of the money.

And then there are the affiliates - it's their role to drive people to the pill sites, from which they can earn a pretty decent commission. They often do this through botnets - illegal networks of compromised computers sending out millions and millions of e-mails every day. They're the people battering against your spam filter, trying to find the magic combination of words that'll get into your inbox and get you to click.

If they get this right, they can earn a decent amount of money. Most of them, however, don't get it right. Just 10 per cent of pill-selling affiliates make 75-95 per cent of the money. And that's the genius of the partnerka model: they'll let anyone have a go at cracking the filter problem and most people will fail, but they don't really care. Sooner or later, throwing enough people and ideas at the problem will result in success.

And that feels weirdly familiar to me - a lot like what we'll get out of all the massive inventory and algorithmic controls of digital advertising. Lots of tiny attempts to get our attention, with only occasional victories. Is it bad? I'm not sure. It's probably inevitable. Just don't send me a press release about it.

This article was first published on campaignlive.co.uk

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