Did you know that over 250,000 new websites hit the internet every day?

It’s a mind-boggling statistic, and one that underlines the opportunities available to web hosting companies as they look to put their mark on the digital world. However, sustained success requires understanding the many issues that need to be overcome and identifying ways to bring in revenue that don’t overburden technical infrastructure or manpower.

This article provides a useful introduction to this world of wires and servers. In it, you’ll learn about the market realities that have existed in recent years and how Analytics-as-a-Service can open up a lucrative additional income stream without any costs or heavy lifting.

So without further ado, here we go.

Introducing the Main Problems Faced by Web Hosting Providers

Let’s start with the obvious: competition. This is nothing new; it’s a saturated market and always has been. 

Today, the 12 biggest providers handle the hosting for 42% of live websites but there are a further 330,000 players looking for their slice of the pie. That’s quite the fight, and it can be challenging for them to stand out from the crowd – and especially since, ultimately, they’re all selling the same product.

The top 12 web hosting providers account for 42% of total market share (Source: hostadvice.com)

The result of this is plain for all to see. Customer Lifetime Value (LTV) has remained static for most of the last decade while Customer Acquisition Cost (CAC) has gone up, particularly since other tech companies like website builders are now offering web hosting services and competing for the same customers. Of the two, hosts have more agency over LTV growth but there are other issues to contend with.

COVID-19 stopped the world in its tracks. And while lockdown brought more business online, web hosting companies suffered from economic uncertainty and supply chain disruptions. Lockdown finished nearly half a decade ago, but slow economic recovery, inflation, and high interest rates continue to hamper the industry’s true growth potential. 

The pandemic marked the end of a long growth era and web hosting providers have responded to the pessimistic market climate and growing server, data center, and software costs much like other tech companies. They’re cutting costs, laying off staff, and looking for innovative new ways to attract customers and increase revenue.

But this reality only exaggerates ongoing market challenges that haven’t gone away. Hosts work in what is an unstable digital environment that makes it difficult to sustain fast website load times, maintain uptime, secure servers, and provide scalability for end users. It’s not easy when purse strings have been tightened by necessity, but particularly so given that staying afloat means keeping pace with the cloud migration and adoption of artificial intelligence and machine learning by prominent industry players.

So How Can Web Hosts Increase Revenue?

One obvious way is to increase prices, and many players have chosen to do this at the renewal stage of the customer lifecycle – pull users in with an attractive introductory rate, give them time to imprint on the service, and then hike up prices at the end of their subscription period.

But another reliable approach is for hosts to identify and emphasize their unique value propositions, be it specialized expertise, performance, customization, or customer support. Other characteristics to push include security, privacy compliance, and the environmental sustainability of underlying infrastructure.

Web hosts are also driving revenue growth through strategic audience targeting. This specialization of service provision can mean focusing on acquiring large enterprise clients, eCommerce businesses, developers, or others with advanced hosting, infrastructure, and support needs.

Many companies have also expanded their portfolio of services beyond hosting, domain registration, and email as a way to drive revenue growth. Take a look at the market, where many of the most successful providers now offer CMS, eCommerce integrations, and advertising credits, among others. 

And while investing in the development and maintenance of these new features can be expensive and place additional strain on company infrastructure, these issues can be removed completely with Software-as-a-Service (SaaS) partnerships with third-party platforms. The popularity of this approach is reflected in the SaaS market, which has doubled in size since the end of the pandemic and is expected growth by a further 350% between now and 2030.

SaaS market growth since 205 (Source: Verified Market Research)

Analytics-as-a-Service Is Another Lucrative But Underutilized Solution

Analytics partnerships remain conspicuously absent from much of the web hosting industry’s arms race for the moment, with some hosts providing customers with Google Analytics or another rudimentary website statistic tool of their own creation. This will change given the importance of these platforms to effective website development, but it means that web hosting providers can easily increase their own differentiation by offering clients an advanced website intelligence solution like TWIPLA.

Analytics-as-a-Service partnerships allow hosting providers to seamlessly integrate a website intelligence toolkit into their own interface via iFrame or API path, and under their own branding. The process can take anything from a matter of minutes to a few development days depending on the route that these companies choose, but it enables hosts to provide advanced analytics features to their end users without the financial investment, technical expertise, or human resources required to develop these capabilities in-house.

This integration then provides hosts with income from end-user subscriptions, via either a pay-per-usage or revenue share agreement. They can set pricing levels, offer a free trial period, tailor feature packages to their audience base, and use the website intelligence toolkit to motivate premium plan uptake. These integrations are also fully managed by the AaaS (Analytics-as-a-Service) provider, which remains responsible for all onboarding, maintenance, and support at no cost to the host.

It’s an Attractive Proposition for Customers

Analytics is an essential component of any website owner’s martech stack since statistics on visitors, channels, marketing campaigns, and device preferences take much of the guesswork out of web development strategies. And by offering these features natively, hosts significantly increase the appeal of their platform, giving customers more reasons to sign in and engage for longer.

But website intelligence platforms go further than traditional analytic platforms by also offering visitor behavior features like heatmaps, session recordings, and conversion funnels. Some like TWIPLA even offer survey and poll functionality. These intuitive visualization tools make complex data easy to understand, and enable end users to see their website through the eyes of its visitors and get actionable, data-driven insights that can drive end goals.

The best website intelligence platforms also offer rich customization potential. In practice, this means giving end-users the ability to create custom dashboards that tailor reports to the specificities of their business. It also means being able to calibrate which events are tracked automatically by the platform, and being able to activate additional custom event triggers so that they can dig deep into whatever is important to their business.

All these different statistical, behavior analytics, and communication tools are normally available from different third party analytics providers. But website intelligence platforms fuse them together, removing the data silos and compatibility issues that come when trying to use multiple platforms holistically to shepherd website optimization towards end goals. It’s also great for data management, and reduces the number of website integrations required by end-users.

The heatmap tool enables end-users to see collective webpage traffic engagement.

But Where’s the Proof?

While analytics partnerships are few and far between for the moment, there are enough of them floating around to understand their potential and there’s more than enough research on the subject to dispel any lingering doubts.

For instance, a study by impact.com found that companies that invested in partnerships from 2020 to 2022 saw an average of 30% annual growth. Some experienced far more. Take Rever, a Vietnam-based property brokerage service platform. They partnered with a website analytics platform and saw 600% revenue growth in just 10 months. It makes sense given how vital analytics features are, even if this is probably the high water mark of what AaaS (Analytics-as-a-Service) partners can expect to reach.

There are also many examples in the web hosting industry that are real food for thought, but let’s look at AWStats, a website statistics tool that hosts can access through their cPanel. This has proven popular with web hosts who are able to provide their users with additional services. In this way, hosting companies can work on boosting customer loyalty and strengthen their brand in an increasingly competitive environment. 

And given that these advantages are available from what is a rudimentary website statistics tool, it’s clear that a more advanced website intelligence integration would give web hosts an edge over AWStats providers, and experience a bigger bump to their bottom line, through revenue share models.

But What About Privacy Compliance Issues?

That’s the kicker. Website visitor data is tightly controlled by global data privacy legislation, with GDPR both the most famous example and the model for the many global copycat laws that have mushroomed since 2018. Businesses that mismanage this data risk large fines, reputational damage, and – at worst – can be banned from operating online altogether.

In practice, this means implementing a cookie banner to obtain the explicit, opt-in consent from internet users before collecting their data. It means being transparent about what data is collected, how long it is stored, and how it is used. Companies need to have clearly defined data processing agreements, conduct regular audits, and allow subjects to amend or delete any data on request.

Unfortunately, businesses can be dissuaded from adding analytics to their martech stack by all the compliance work that this integration category creates. It can also be difficult for them to fully understand their legal requirements and whether they are meeting them.

But privacy compliance is a defining characteristic of website intelligence integrations. Some like TWIPLA come out of the box fully compliant with all data privacy laws – GDPR and ePrivacy included. This is made possible by advanced cookieless tracking technology that doesn’t require visitor consent – meaning that they can do away with the cookie banner that acts as an ugly barrier to data collection, increasing data collection by around 500% when compared with cookie-based alternatives like Google Analytics.

However, end users that need to collect personal data can select a lighter privacy mode and adopt the necessary privacy measures. Data capture can also be calibrated on a country-by-country basis to maximize the accuracy of insights without breaking the laws that protect each website visitor.

The dynamic privacy center enables end users to optimize data capture to their requirements.

TWIPLA is a leading player in the emerging website intelligence market. Founded in Germany, the company is quietly guiding the success of 1.5 million websites around the world and is the top rated analytics integration on Wix. With privacy-perfect technology, a global content delivery network, and a complete toolkit of website analytics features, our mission is to provide accurate, up-to-the-second insights on web performance without encroaching on internet user data rights.