TLDs: Invest or Don’t? by Dan Pulvino, Brad Herndon, KC Madock, and Iryna Mogilevich

A top-level domain is the highest level in the hierarchical Domain Name system of the Internet. These domains are managed by ICANN (Internet Corporation for Assigned Names and Numbers). In 2012, ICANN launched a program allowing for nearly an unlimited number of new TLDs.  There are four categories of TLDs for this new era: Infrastructure, Country Code, Internationalized, and Generic. ICANN accepted 1,930 applications for new TLDs and there is potential for 300-1,000 new generic TLDs to be introduced over the next several years. Currently there is a large reseller market for gTLDs; Donuts, Inc. has been the main applicant for gTLDs, with Amazon and Google following close behind. Most companies have purchased their branded TLDs, but only a few brands have rolled out their actual execution of TLD strategies. Presently, the top gTLDs are .club and .guru with 64,905 and 60,717 domains respectively. Strategies for TLDs include:

  • A new “sub-domain” strategy that builds upon the first level domain rather than the second level, which allows for a more simple domain structure and better branding opportunity.
  • Increased visibility with targeted TLDs communicates a brand’s expertise, location, or skills to site visitors.  This drives brand awareness and encourages engagement.
  • Integration into omni-channel marketing campaigns will help create a seamless user experience by increasing brand relevancy in online and offline marketing by providing a holistic marketing strategy and strengthening the brand’s offering.

The introduction of new TLDs has the potential to change the landscape of the Internet. As a result, organizations should consider the impact on their brands and develop strategies to support the new infrastructure.

 

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Potential Benefits:

◦       Increased Income: For every domain owned, there is potential to sell numerous subdomains. For example, running.shoes, dress.shoes, casual.shoes, etc. This is a similar service to GoDaddy or others selling .com domains.

◦       Targeted Marketing Strategies: An organization can own an entire TLD space and have an unlimited selection of subdomains to market a brand. This provides possibilities for brand differentiation and increased product awareness, since a brand may own a subdomain for each product (X5.bmw, iphone.apple), as well as increased acquisition, engagement, and conversion from internal/external campaigns, especially organic search.

◦       Potential for Innovation: Having full control over a TLD allows for differentiated capabilities to build better brand definition, brand awareness, brand loyalty and trust

Considerations:

◦       Expensive to Own: There is a $185K application fee, and no guarantees or refunds. If two or more companies bid for the same gTLD, it goes to auction with no price ceiling.

◦       Piracy & Hijacking: Plural and singular domains will both exist providing opportunities for traffic hijacking and confusion. Anyone can buy a branded subdomain, which could drive traffic away from the actual branded site.

◦       Customer Trust: Consumers may be suspicious of new unfamiliar TLDs, and the new architecture may confuse non-technical and non-English speaking users. New gTLDs provide the opportunity for brands to become more memorable, increase diversity and expand choices for businesses. With every company having their own agenda, it is important to research current industry trends and understand what competitors are doing. Companies should outline all current web properties and marketing campaigns with their existing domain structure to determine potential opportunities. In doing so, companies should also create a domain strategy for all future web properties and campaigns including evaluating and incorporating TLD strategy into existing and future digital channels. It is essential for each business to evaluate the risks associated with strategy.  After a strategy has been defined, companies should acquire relevant TLDs based on their new domain strategy. Once the new TLDs have been acquired, companies should implement governance processes within their organization for the ability to review industry adoption, competitor analysis, and influence on digital marketing tactics. Given the benefits and considerations for investing in new gTLDs, companies should proceed with caution.

 

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