A $20 Billion VPN Industry is Expected to Grow to $36 Billion by 2022 but Entry for New Entrants is Not That Easy, as Researched by VPNRanks.com
VPN industry is one of the most lucrative niches today. A $20 billion industry could be worth $36 billion by 2022. However, a research conducted by VPNRanks.com shows that entry into the industry is not as easy as it once used to be. New entrants would face numerous problems such as intense competition, high cost of advertisement, and factors affecting VPN conversion rates.
MADISON, Wis., September 24, 2018 (Newswire.com) - There are many profitable niches that aspiring entrepreneurs look to enter and VPN industry is one of them. Over the years, VPN industry and its affiliate model has made many rich overnight, and with little investment. However, all that has changed, as new entrants would face various challenges when entering this industry.
Research by VPNRanks.com takes users through the transformation of the VPN industry and the problems faced by new entrants. Among many challenges, intense competition is one that catches out new entrepreneurs. With network backed content publishers making inroads into a $20 billion industry, which is expected to grow to $36 billion by 2022, it’s no surprise that everyone is looking to take a bite out of the lucrative industry.
The other problem that could become a barrier to entry is the rising cost of advertisement in the VPN industry. Initially, VPN providers and affiliate marketers were operating on a fixed commission based structure. However, with the introduction of the CPA model, all that changed as advertisers would only pay once an affiliate would make a sale. This meant that qualified leads would be sent by affiliates that would have a high chance of converting.
According to the study by VPNRanks.com, the average CPA cost increase exponentially over the last two years. In 2016, the average CPA was around $2.00, but it rose to $40.00 by 2018, showing a 2000% increase. Such rising costs make online advertising unaffordable for many and make the industry not as profitable and sustainable for new entrants.
The research further showed that apart from the intense competition and high costs, VPN conversion rates played an important role in the success of new businesses. However, conversion rates transitioned from ranking a VPN at the top to having a high brand power.
Several experiments by the review website showed that low brand power VPN would result in numerous clicks with low conversions. This meant that placing a VPN at the 1st position in a listing does not guarantee high conversion rate and brand power of a provider plays a vital role.
Senior Editor at VPNRanks.com, Aazim Akhtar stated, “The VPN industry is heading towards a new direction and has transformed considerably over the years. Some websites and VPN providers that were a dominating force a few years ago are nowhere to be seen today. However, one thing that is apparent from the research is that the brand power of a VPN is a critical factor for VPN affiliates. In order to achieve high conversion rates, VPNs with high brand attraction are being placed at the top by many review websites. And it is about time that VPN services with low brand power start working on improving their brand image…”
Source: VPNRanks