Peter Jensen is a marketer's dream: He's 30, single and well educated, he likes to purchase expensive toys online, and he checks his inbox constantly. Which is why he's inundated with spam.

The founder of a San Francisco startup, Jensen is savvy enough to supply fake e-mail addresses when he registers at Web sites and to use his e-mail software's filtering tools. But he still gets at least 10 unsolicited messages a day - irritating come-ons for everything from snore cure-alls to get-rich-quick schemes. "If these were brick-and-mortar stores," says Jensen, "my inbox would be the seediest strip mall in town."

Jensen is hardly unique. According to eMarketer, a New York-based market research firm, 22 percent of the e-mail an average user receives today is marketing-related. Roughly half of those messages are "opt in," meaning recipients gave vendors permission to send them. The rest are unsolicited. And it's only going to get worse: By 2003, eMarketer estimates, 29.7 percent of the e-mail you receive will be marketing of some sort, and three quarters of it will be unsolicited. Advertisers spent $179 million on e-mail advertising in the U.S. in 1999 and $496 million in 2000; by 2003, they're expected to spend $2.2 billion.

It's easy to see why marketers love e-mail. For starters, it's cheap: Jupiter Research estimates a modest snail-mail campaign costs $20,000; you can reach the same number of consumers by e-mail for $1,000. Also, results can be tracked instantly. And those results are impressive: While banner ads pull a measly 0.5 percent response rate, and a successful snail-mail campaign attracts 2 percent, e-mail marketers have touted response rates as high as 10 percent.

But those response rates are dropping. Over the past year, the average click-through rate on an e-mail ad has dropped by half, to around 5 percent, according to eMarketer analyst Jonathan Jackson. Says Donna Hoffman, professor and co-director of the eLab at Vanderbilt University (dossier), "E-mail marketing is going to go the way of banner ads."

No wonder: Users like Jensen are so inundated with marketing messages that they're throwing out the good with the bad. While e-mail marketing gurus take great pains to distinguish good, permission-based marketing - the kind that they say can still produce response rates of 10 percent or more - from plain old spam, that difference is not always clear to recipients. As Martha Rogers, founder of the Peppers and Rogers Group, a management consulting firm, puts it, "E-mail from somebody I don't know is still e-mail from somebody I don't know."

Part of the problem is list rental. Back when you felt all warm and fuzzy about your latest online purchase, you might have clicked the box that told the vendor, "Sure, I'd like to get news from you from time to time." Little did you know that online marketers trade e-mail addresses like third-graders trade Pokemon cards. E-retailers constantly rent and sell their customer lists to large-scale marketers, who then rent or sell the lists to others.

24/7 Media (TFSM), for example, has a database of 25 million e-mail addresses - all of whose owners agreed to receive messages from e-mail marketers at one time or another - which it rents to other vendors. As those precious addresses migrate from one marketer to another, the messages those vendors send out become less and less relevant to the consumer who originally asked to receive more information about, say, cell phones.