At a recent ICANN (Internet Corporation for Assigned Names & Numbers) board meeting, the group proposed a new program that would open up an endless world of domain naming, allowing organizations to operate new generic Top Level Domain (gTLD) registry. The radical change will launch the world’s domains beyond our current gTLDs (21 total, including .com, .net, .org, .edu, .gov, .mil and .info), many of which are widely recognized in our daily Internet usage. According to this new program, ICANN would allow for nearly any extension between three and 64 characters in length, including regional suffixes, generic words and brand names. This ‘explosion’ of new gTLDs would permit large brand owners to become top level domain registries.
An application process for new gTLDs is scheduled to start in early 2011. Organizations, especially large brands, must contemplate an investment for operating new gTLDs. On Nov. 12, 2010, ICANN announced a new applicant guidebook. According to Law.com, ICANN estimates there will be between 300 and 500 applications for new gTLDs during the first round, and stated during its recent board meeting that it could handle the delegation of up to 1,000 new gTLDs in a year. A brand’s ability to maintain their own gTLD will spawn serious questions, costs and possible advantages to organizations and brands looking to expand their strategic approach. It is worth noting that new gTLD applications are already being announced. For example, Japanese camera company Canon has announced its bid for the .canon domain. However, the U.S. government is in strong opposition of this application guidebook being approved (i.e. this letter from Commerce Secretary Larry Strickling voices governmental concerns).
Costs & Legal Considerations
While the application fee for each proposed extension will be $185K, the expense is worth considering, particularly where there are other brands who might stake claim to the same mark. If an application is successful, there will be an annual fee of $25K paid to ICANN, as well as transactional fees if a certain number of domains are registered or renewed with the new extension. By the time all fees are taken into account, companies can estimate incurring a total cost of between $400K-$500K upon securing a new gTLD. Further, in addition to monetary costs, companies need to consider the operational costs of maintaining the technical and infrastructure expertise to administer a TLD.
Trevor Schmidt’s article at Law.com provides strong insights into the legal implications of ICANN’s new program. There, he notes that trademark owners must now be concerned with protecting their marks not only at the second level (meaning, to the left of the dot), but also at top level (to the right of the dot). Owners will most likely need to focus the majority of their efforts on protecting their brands at the second level.
Implications for Marketers
Below are a few considerations for digital marketers.
SEO (Natural Search)
Since search engines crawl and rank documents found on domains, any updates will alter or expand the universe of domains that become indexed in the search engines. SEO will remain an important focus as we understand the full impact.
When transitions do occur, brands will need to become more aware of technical best practices like “canonical” tagging or URL redirection techniques.
A second-level domain aligned with a new gTLD (branded or generic) will require relevant content and link popularity to gain rankings, but will likely receive kudos from search engines if the semantics of second and top level domains line up.
Organizations who invest in becoming the registry for gTLD’s such as (.tax, .cars and .hotel) will likely produce the rollout of opportunities that marketing brands will consider in a new pursuit of second level domain investments.
The .com domain will likely remain a key gTLD until user behavior adapts to the evolving domain space.
CPC (Paid Search)
Any brand that considers alignment of new second-level domains (i.e. .soda or .cars) as part of a paid search campaign should test the strategy against the .com domain. For example, .soda could either lend more credibility and increase CTRs or make the consumer question if it is the brand they are looking for, thus decreasing CTRs.
There is also a question around how the Google algorithm would treat this in terms of determining quality score based on relevance of creative.
As brands eventually move to control their own trademarked gTLDs, for example .coke, the ability to control security in their affiliate programs, producing more trust for end consumers. This could aid in monitoring the competitive landscape and determining which ads are affiliate ads and which are not registered as affiliates.
Maintenances and workload for IT groups might increase to manage the complexity of the new landscape. Management of second-level domains with TLDs may also grow in complexity. If brands take on domain registry operations, it could be another area of expertise. Valideus.com offers a benefit and challenge of new gTLDs:
PRO: Control who is in your registry by banning fraudsters, such as phishing and malware scams, and building trust in your online presence as a safe and secure domain.
CON: New technical registry support, operational and infrastructure will often go beyond the existing competency or resources of organizations.
The vast Internet population is finally comfortable with a .com world. Changing our familiar address bar (domain) experience will be tough-going, as users have begun to embrace the normal Web protocols.
While proper SEO or technical best practices can help navigate how users adapt to a new experience of gTLDs, the transition will probably not be a seamless one.
ICANN likely feels the new gTLD system will give proper order to the domain landscape, but sorting this out will be a second wave of confusion for businesses and users alike.
Marketer Considerations Ahead of Roll-Out
Marketers and brands cannot ignore this ‘opening of the Internet floodgates’ by ICANN. If you’re looking to stake your claim on a new gTLD, consider the following:
Ensure key stakeholders of your organization and brands become aware of the potential change and are budgeting money and resources accordingly.
Get the legal department involved in the forthcoming risks or issues that surround the organization’s trademarks and provide them with information on registration disputes procedures.
Brands should converse with their IT department to better understand limitations or capabilities to manage this new gTLD registry or sponsorship and how to act accordingly.
Monitor gTLD applications that create conflicts and grounds for appeal.
Understand the costs and application process around taking ownership of a new gTLD and ROI justification.
Develop a brand-centric marketing plan to secure “potential” application of all trademarked gTLDs.
Evaluate geographic or strategic keyword-based gTLDs that might warrant registry application or future alignment of second level domains. Below are just a few examples of the endless expansions.
second-level-domain.yourbrand – (brand/trademarks)
second-level-domain.hotels – (generic/strategic keywords)
second-level-domain.shop – (generic/strategic keywords)
second-level-domain.london – (geo/strategic keywords)
second-level-domain.free – (promo/strategic keywords)
second-level-domain.cars – (product and service/strategic keywords)
Multi-brand organizations may wish to consider appointing a specialized consultant or company like Valideus that supports plans for new gTLDs.
Below is the anticipated timeline for ICANN’s new gTLD rollout:
The opportunity is somewhat complicated and very expensive, making the application process a serious commitment. ICANN is responsible for supplying a stable future and expansion of domains across a growing Internet while still maintaining a secure and competitive marketplace. In addition to the expansion of gTLDs, ICANN is also dealing with transitional complexities of the migration from IPV4 to IPV6 and the alignment of IP to Domain Names. This is another looming update that could have significant business and marketing impacts.
ICANN’s gTLD application can be viewed either as a big headache for large organizations or a competitive advantage if organizations do their homework and lock down key strongholds. This type of update could ultimately simplify communication for brands in a fast-expanding digital age, on their suite of branded gTLDs. However, during the initial rounds, both users and organizations will likely be frustrated with an altered and more dynamic domain address landscape.
Before applying, organizations must consider a clear business plan, as well as how to monetize second-level domain registrations and overall ROI. If your brand is aware of competitive situations surrounding trademarks or mark abbreviations, investigate other entities propensity to submit in the first round of applications via ICANN. If your business operates numerous brands, C-Level stakeholders should discuss the fast approaching 2011 rollout.
Contact your 360i strategic advisors for further questions.