Generic top-level domains: What all marketers must know

Over the past seven years, the Internet Corporation for Assigned Names and Numbers (ICANN) has been developing a program to launch an unlimited number of new generic top-level domains (gTLDs), the extensions that appear at the end of web addresses (.com and .ca are examples). This program will allow any entity to apply for any gTLD: .music, .nyc, and .canon have all been discussed as possibilities. In 2008, ICANN published the first draft of the applicant guidebook that contains the rules applicants must follow when applying for a new gTLD.

Since then, the program has garnered significant controversy. ICANN maintains that it has always been the destiny of the domain name space to include many gTLDs, and that introducing this potentially massive round of new gTLDs will foster innovation. Many businesses and intellectual property owners are concerned about the costs they will incur to protect their trademarks across an unlimited number of new gTLDs. That tension has led to six subsequent revisions of the applicant guidebook over the past three years. While many argue that there is still substantial room for improvement in the guidebook, ICANN officially approved the new gTLD program at its public meeting in Singapore on June 20, 2011.

For months now, many gTLD service providers (those offering application preparation, registry infrastructure, etc.) have been bombarding potential applicants with marketing, urging them to apply for a gTLD and to partner with them in order to do so. This frenzy is creating undue pressure on applicants, particularly brand owners that are considering applying for a gTLD containing their name. Right now, brand owners need to realize that they can resist this hard sell demanding that they "act now" and focus on gathering facts that will help them to determine whether or not applying for a gTLD is the best choice for their business. During this assessment process, they should also consider how they will utilize that gTLD in order to extract benefit from it, beyond easing their anxieties about feeling left behind if "everyone else" applies.

There are multiple reasons brand owners should consider owning their own gTLD. For one, it will provide them with the opportunity to establish and control their own branded space on the Internet. This includes the ability to control what domain names are registered in their gTLD, and the ability to locate their registry in the most favorable legal jurisdiction for their needs. Additionally, owning a branded gTLD could help elevate the status of brand owners as digital innovators, giving them an edge over their competitors. Some brand owners believe owning a new gTLD could also minimize criminal abuses of their brand, such as counterfeiting and financial scams. Others take a more optimistic approach, conjecturing that new gTLDs could help enhance consumer loyalty by offering audience members email addresses and websites that include the brand as the extension of the domain name.
 
Brand owners should give themselves until the end of August to engage in this exploratory phase, and then know whether or not they will apply for a gTLD by September. The application period will open on Jan. 12, 2012, and run for four months. Once that decision is made, and a plan for how to use the gTLD is formulated, then brand owners should begin seeking out a partner to assist them with the application. Because many of the companies that have emerged to provide services to brands are either untested new enterprises or are registrars oriented toward selling domain names rather than advising brands, selecting a partner too early could lead brand owners into a partnership that cannot adequately meet their needs.

For almost all brand owners, the best course of action is to work with a tailored mix of partners to help with the application and liaise with ICANN on a permanent basis while operating the new gTLD registry. Many gTLD service companies are offering package deals, where they have already paired with registry service providers. However, this may not be the best choice for brand owners. In fact, selecting a registry infrastructure provider should be one of the last decisions a company makes.  First, companies must determine whether the registry will be open or closed to third-party domain name registrations and in what jurisdiction to house the registry, in addition to choosing an infrastructure partner that offers the ideal mix of technologies to continue to adapt to however the digital landscape may change in the future.

Of course, owning their own gTLD will not be the best choice for all brand owners. For one, the cost associated with operating a gTLD registry is extremely high; the application alone will cost $185,000. Also, it is likely that business-to-business companies will not benefit from owning a branded gTLD as greatly as consumer-facing companies will.

Another very important aspect to consider is the fact that the application period for new gTLDs will be closed, meaning that brand owners will not know which of their competitors decide to apply for their own gTLDs until after the application period ends. Certain brand owners may feel the safest course is to assume that their competitors are applying, and thus will feel they have to apply in order to have the option to deploy a new digital image and keep up (i.e., not be considered "behind the times"). Those brand owners that choose not to participate in the first round risk potentially having to wait as long as five to 10 years for another application round to open. Unfortunately, I believe that a possible by-product of these two components of ICANN's policy may lead many brand owners to apply for a gTLD based on a fear of missing the boat, rather than the desire to innovate.

All brand owners, regardless of whether or not they elect to apply for their own gTLD, will still need to have a plan in place. They will need to determine across which new, generic-term gTLDs (such as .category and .place names) they will need to register key domain names in order to protect their brands, in addition to which new gTLDs will present new marketing opportunities. Additionally, these brand owners should follow developments in the new gTLD program, since ICANN has promised to continue to refine it, and devise a strategy to raise formal objections to controversial gTLD applications that will be submitted during the application period that may infringe on their trademarks.

Before applying for gTLDs, brands should focus their attention on gathering facts and becoming well informed about the program in order to weigh the advantages and disadvantages of applying. That way, once the application period opens, or the CEO wants to know the plan of action, they will be prepared to make the best decisions for their company.

Joshua Bourne is a managing partner at FairWinds Partners.

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