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How Web Site Hosting Impacts Revenue

A simple Google search of the phrase “web site hosting” yields a startling 180,000,000 results.  While the number of relevant results is certainly far less, it still begs the question: how does one choose from thousands of companies offering seemingly similar services? At the center of the digital universe, of all the money, clicks, bits and bytes moving around the internet – is web hosting.  In this world, slow speeds are a fast death and hours of downtime reverberate into the future like nails in a coffin. Web site hosting is often considered a commodity and for many use cases, it certainly is.  It’s easy to search, point, click, purchase and have a dedicated server or virtual space provisioned instantly.  This certainly lends itself to the notion that most hosting must be similar or equal in value with such ease and availability.  The truth is that web hosting is only a commodity until such time as one’s livelihood depends on it. Disagree? Well, your view will change the first time something goes awry. As I have always said, “You judge the worth of a web host not by the 99% of the time when things are well, rather, by the 1% of the time when things go terribly wrong.”

 

What is Hosting Value?

Everybody likes to save money, so let’s not waste any time and discuss this first.  True value is paying a fair price in consideration for the services received.  Honestly, it takes a technical ninja to consistently leverage success out of cheap and poorly built infrastructures.  Generalizing, consumers usually get what they pay for.  It is the success or failure on each of the criteria discussed below (reliability, performance, security, support, scalability) that one must consider when judging overall value. It’s easy to see differences in quality when you walk into a store.  You can touch and feel the goods, evaluate the store presentation and speak to the staff in person.  I know that when I buy clothes at Walmart they are essentially disposable after so many washes.  Colors fade, garments shrink, materials come apart.  They are engineered to fail and manufactured under second or third world conditions that would make my children cry.  I might possibly appear as a homeless person after two dozen washes.  I’m not offended, however, because I expected all of this to happen.  I paid what I knew to be a ridiculously low or convenient price.  I expected a short life-cycle that ends in the garbage or donated to the Salvation Army.  Conversely, when I buy clothes as a gift for my wife, I’ll go someplace like Saks Fifth Avenue or BCBG Max Azria.  Why?  They are still in her closet after 10 years, looking and feeling brand new.  In 20 more years, they’ll either be in some hipster vintage clothing joint, our closet or part of someone else’s wardrobe. But Brad, I thought we were talking about hosting?  LOL!  We are, but the lessons are still the same.  Online, however, the challenge of shopping is very different.  Buyers are intended to believe everything they read on a web site and have no easy option of investigation.  There are nearly infinite ways to build a network, a data center, an employee training program and even a “simple” server. The differences between good and great hosting don’t seem to matter when everything is working fine to the naked eye.  The measurement can often be abstract, such as opportunity cost.  What does it cost your business in views or clicks if an ad takes .5 seconds or 1.5 seconds to load?  What is the difference in conversion to sale when videos buffer at some point for a third of your viewers?  How much might it cost if your site was unavailable for minutes daily or an hour a month?  What is the cost to your business if site responsiveness decreases by 50% between 5 and 7pm EST?  What would it cost you if your server storage RAID failed or if your host had a corrupt backup?  How angry do you get when you call support and get a junior systems administrator with a thick accent in another country with limited systems access reading from a script?  What if the person who can solve your problem is two layers of support and 30 or 60 minutes away… what is your time and your up-time worth? Good hosting is the sum of its parts!  While it’s not easy to find the perfect provider, you may be closer than you think if you know how to look under the hood.

Reliability

…is not being online for 99% of the time, it’s being online for 99.999% of the time.  The difference is approximately 87 hours of downtime versus 1 hour of downtime, annually.  Reliability starts at the edge of a host’s network and ends inside your server.  Every piece, part and decision in between makes a difference in the reliability of your delivered hosting product.  Some hosts build computers out of consumer parts and cases and put them in rooms without proper power and cooling.  Consumer and enterprise components have different failure rates.  Proper cooling and power systems have perhaps the largest impact on hardware health and uptime.  Did you know that there are four reliability tiers for datacenter construction and that each level costs twice as much as the previous to construct per square foot?  Reliability in hosting is an infinitely large topic.  As a consumer of hosting services, it is your responsibility to decide what your ability is to survive downtime and outages.  If you are buying traffic and sending it to an unresponsive server, it could get expensive quickly.  If you are an advertising network, downtime affects your entire ecosystem and reputation.  If you are a subscription site with unique content and a loyal following of long-time customers, they may be more forgiving and the impact of downtime simply limited to the loss of new sales.  Figure out how much you can lose and what that’s worth to you in every respect and shop for a match in a hosting company that by appearances matches these core values.

Performance

…is measured in milliseconds more often than seconds!  Go with your gut.  Do your research.  Be the surfer, get in their shoes.  Talk to references, any legitimate operation should be able to provide you with a litany of satisfied customers who would speak of their experience.  Surf yours and other people’s web sites.  How do they load?  Check from different locations at different times of day.  What is the value of a customer to you?  If you are selling access to videos and content, customers surely won’t retain, return or stay long on your site if videos don’t play well.  You can’t make every surfer on the internet happy… but you can make most of them happy and you should insist on this!  In my experience, revenue always follows performance.  It is important to engage experts to tweak performance but always to balance this with your gut instinct.  Go with your gut, fearlessly into the future and don’t be afraid to be paranoid.  Question everything, this is how we learn and become the best.

Security

…is often considered “important” yet mysterious – until you’re hacked!  Poor security can ruin your business, lose your data, kill your business relationships, harm your surfers and create trouble with authorities.  What is the bottom line?  If you’re not a security expert, make sure you have access to them for resolving problems.  Security starts with server provisioning and deploying a long list of best practices on your hosting space.  It doesn’t end there!  A mature hosting company should also have protocols for giving customer support so that your account can’t be impersonated by email, instant messenger or phone.  Whether your business is big, small, interesting or uninteresting – you need to assume that every day, multiple people for reasons unknown are trying to break into and exploit everything you have online.

Support

…at MojoHost, we pride ourselves in the ability to meet clients wherever they are in the spectrum of technical knowledge.  Whether they require wholesale infrastructure or fully managed hosting, we have them covered. But we have our limits and we discuss these openly with potential customers.  For example, we are partners with Microsoft and license their products for use as an authorized Service Provider.  We do not specialize in fully managed Windows hosting the same as we do for Linux platforms.  Your business must be honest with itself so that it can pick a hosting provider that is a good match for its technical requirements.  If you need server ninjas for complex server tweaking and software debugging, then make sure they are available at your provider.  If you have intense database activity and page loads, chances are that you will need advanced support over the life of your business.  If your needs are simple and you don’t require assistance installing scripts, running backups, or configuring parts of your setup, then perhaps you need only a control panel or no support at all.  Support is often the area that customers are most likely to get what they pay for.  Whether the host is well staffed, outsourced and at what level of capability; is all in question.

Scalability

…matters whether you are growing OR shrinking!  While I hope that your business always grows, usually every business encounters challenging moments over its lifespan.  How quickly a provider can ramp up or remove services can make a big difference to customer success.  We’ve had the calls about clients going on Howard Stern in the morning, etc.  We have also followed customers from spends of hundreds per month to more than a hundred thousand per month, and all the way back down to zero.  What a host is willing to do for its clients, how fast it can be done, at what cost up front, at what cost over time and in consideration of what contractual term (none, multi-year) are all important considerations for hosting clients.  I know that for my business, we are happy to take risks with our best clients and ride the wave with them.  I would rather support a client attempting to innovate and take some risk with them than to not have the opportunity at all.  We would rather be on the side of success.  We believe in our business, it is always empowered with available millions of dollars in servers and infrastructure to empower clients with immediate turn-up of services.  Rarely do we have to order servers, network or components to turn up new orders, instead, preferring the ease of ordering hundreds of server builds in advance.  Depending on what you endeavor to accomplish and on what timeframe, questioning a host’s inventory of available servers, rack space, installed power and network infrastructure should never be out of the question.

Relationships

…are a funny thing, aren’t they?  Whether you ever know or have a conversation with your host, its owner(s), sales people or support staff is likely up to you.  These are all options and you’ll pay to play, if you want them.  This might afford the opportunity to wake up an owner in the middle of the night, if you want.  The host company owners or sales team could be savvy world-travelers and always looking to match-make and help clients grow their businesses.  You never know unless you explore.  Not everybody lives in a vacuum.  The best new customers are usually referrals from satisfied clients or business influencers with amazing credibility.  Hosts have a special fiduciary responsibility to their clients.  Like a lawyer, banker, priest or rabbi, they must protect you and your business at all costs.  The best advice I can offer is to find a web host that establishes themselves as great fit and partner for your business in whatever capacity meets your needs and values.  In your best and worst of times, this is one of the few relationships that can see you through the clouds to your dreams. 16dda61a-a848-4f3d-ba09-311b41d1293a

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Credit Card Processing for Dating Sites

DigiWorld Partners had the opportunity recently to sit down with Conal Cunningham of InovioPay to discuss some of his insights regarding credit card processing. More specifically, the short session was dedicated to credit card processing for dating sites, which has become a booming industry now estimated to have annual revenues of about $2 billion in the U.S. According to Pew Research, online dating among 18- to 24-year olds has nearly tripled in the past three years and doubled among 55- to 64-year olds. This trend shows no signs of slowing anytime soon. Credit card payments for dating sites, however, is considered risky business for many card issuers, which was a main topic during this interview. Why Dating Sites Are Different The reason dating sites are considered to be one of the most dangerous environments for credit card processing is because of the unusually high probability of chargebacks. If, for example, a legitimate charge is made on an individual’s credit card and this purchase is later discovered by that person’s significant other, he or she may dispute the charge and initiate a chargeback through their bank. When this occurs, the dating site receives a black mark from their card processor, even though the site itself has no control over the situation, since the purchase made on the card was totally legitimate. This is why businesses utilizing credit card processing for dating sites should have the necessary risk mitigation services in place to protect themselves from the negative aspects associated with this industry. Failure to stay ahead of chargeback problems and bank disputes so prevalent in the online dating sector can result in revenue losses, increased transaction costs and even fines.

 

 Charges Versus Fees While the percentages that banks charge dating sites per transaction are typically in line with those for other online retailers, the real cost stemming from disputes turning into chargebacks is in the fees your bank will levy. Cunningham explains that in many cases these can be as high as $45 per incident. In addition, many banks set fraud thresholds of as low as 1% for dating sites. According to Conal, anything in excess of this 1% can carry fines starting at $100 per incident.   Keeping Outside of the Chargeback Channel To get in front of these problematic chargeback issues, InovioPay works with networks that have good standing relationships with the big name banks that issue most of the credit cards used by dating site visitors. In the event of a dispute, rather than going to the bank whose name is on the credit card and initiating the chargeback process, it’s handled in the background without ever going through the card issuer. A refund is guaranteed to the customer and the entire matter is handled without incurring high fees or fines. This also keeps the incidence of fraud below the 1% threshold, thereby keeping the account in a healthy condition.   Friendly Chargebacks and Chargeback Mitigation No matter how sophisticated your credit card processing for dating sites may be, there will always be people who try to beat the system by purchasing your service and then later going to their bank, complaining for some reason and demanding a refund. This is called “friendly fraud,” and there’s basically nothing you can do to prevent it. If, however, you maintain a friendly relationship with the merchant banks that issue credit cards, Cunningham states that it’s possible that those banks will simply issue a refund without any fanfare and without incurring any charges, fees or fines.   Communication With Customers Good communication with your customers is another critical factor in keeping your relationship with your credit card processing company on a healthy footing. Conal explains the importance of the descriptor you include on customers’ bank statements. This message should provide them with an easy means for contacting your company, either by phone or on the website, if they have a questions, problems, or disputes. You want them to feel it’s easier to contact you than to contact their bank. This is why your customer service lines should be open and answered immediately. If someone goes to the website for assistance they should see a message that says: “Do you have a problem? Click here.” Communication should be quick, easy and responsive.   High-Risk/Low-Risk Classifications Conal goes into options the credit card companies have in classifying businesses as either high- or low-risk. He explains that much depends on your payment relationship with the banks. This can affect the 1% fraud threshold when fines start being levied. While businesses classified high-risk may have a higher fraud threshold, the downside is that some banks may decline charges from a high-risk business. Learn more about InovioPay and credit card processing for dating sites by watching the entire interview video. It’s important information for those in the dating site game. 2b672451-586b-4c06-a884-dc76d1ac8229

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Why Mobile Marketers Need a Carrier Billing Solution

DigiWorld Partners invited Wister, one of our trusted partners, to share their knowledge on the place of direct carrier billing in mobile marketing. Here, you can read the highlights of this conversation and apply them to your marketing strategy.

Marketers today put a high premium on mobile traffic. More consumers are connected to the world through mobile devices, so it’s become a huge platform for marketing, yet there remain so many unknowns. The most important aspect of any mobile marketing strategy is being able to monetize traffic. For companies trying to launch products overseas, this goal only becomes trickier.

An effective strategy in monetizing traffic is capitalizing on impulse buys, meaning you can’t give your consumers too much time to consider their purchase. Worldwide, that instant payment comes from direct carrier billing. For this reason, Joey Gabra, the managing director of Wister, an international mobile services provider headquartered in Paris, urges marketers to have a plan for direct carrier billing.

The Global Significance of Carrier Billing
Direct carrier billing, or what’s sometimes known as direct operator billing, is often overlooked in North America. However, on a global scale, this payment method is massive. Research firm Analysys Mason predicted that carrier billing will provide telecoms worldwide with more than $12 billion in revenue in 2022. Juniper Research forecasts that the the value of digital content billed directly through carriers in Europe will reach more than $7.1 billion (or 5.2 billion Euros) in 2017.

Gabra explains that credit cards aren’t as prevalent in other parts of the world, which is why direct carrier billing is a more popular payment method in certain countries. It’s also especially important for consumers in emerging markets who may not have the Internet or computer access to use other types of payments.

Technology for carrier billing has expanded for these reasons. What was once a way for consumers to buy ringtones has become a one-click payment avenue for all sorts of products on different devices and consoles. Because it doesn’t require credit or debit card information from customers and creates one-time passwords for authentication, it’s also considered safer than other billing methods.

Carrier billing sounds like the obvious choice for anyone trying to market on a global scale, but there are downsides. The biggest complaints against it are that obtaining authorization from each individual mobile carrier is a tedious process and payment cycles can last up to 120 days. That’s not a great plan for businesses that are trying to get off the ground and in need of cash flow.

The Various Solutions
So what are companies to do? Clearly it’s not ideal to look for a carrier billing solution on your own. It’s a long, risky process that can take up to six months per carrier.

Luckily, there are solutions that can give a business access to these mobile carrier connections without having to do all the complicated legwork. These services can also help you get paid regularly, which mobile carriers often cannot do.

Gabra’s company, Wister, does just that, but he encourages companies to do their own research and make informed decisions about the services they choose to partner with. That’s why Wister created Mobademics.com – an educational resource for everything mobile

Now that this billing method has become so intrinsic to successful mobile marketing, there are a rising number of global payment companies out there that marketers need to learn about.

To learn more about Wister and carrier billing solutions, please watch our interview with Joey Gabra.

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