DigitalBrandNews

Whether or not to acquire a .brand Top Level Domain (or gTLD) depends on an organization’s brand and marketing strategy, market position, customers and possibly even its partners and channels.  The big question though is what will those elements look like five years from now?  Five years is beyond most strategic business plans and in Internet time is an eternity. 

Why a five year horizon?  First, it will be over a year from now before any newly applied-for gTLD goes live.  Then, it could be two to three more years before the next application round. The .brand gTLDs that get through the process quickly will have the most time to gain user adoption.  And if successful, that could increase interest from other companies in applying in subsequent rounds as they attempt to catch up. 

For companies there are essentially three approaches to new gTLDs: 

1. Take no action / wait and see
2. Apply for a .brand gTLD for marketing potential
3. Apply for a .brand gTLD to keep the name from being registered by another entity 

The first approach would likely be the preference for most organizations – let the early adopters test the water and then determine if new gTLDs do in fact develop brand power.  However, the reality is that the universe of unique names is limited. Waiting out the first round creates the risk of competing in a more crowded field in the next round. 

Companies that invest heavily in marketing and advertising will want to consider the second approach.  The ability to have a consistent brand strategy for URLs and the ability to create them on demand will provide significant value. But there are other additional benefits that can and will also be explored from a marketing standpoint. 

The last option is the safe bet for companies that value their brand, especially where there are multiple brands in the world with identical or closely similar spellings.  It still requires completing the ICANN application and evaluation processes.  If successful, the company will be required to enter into a relationship with ICANN for the gTLD and to maintain a registry (however the cost of maintaining an idle registry may be considered reasonable).  This option will ensure the appropriate gTLD is in the brand portfolio and the company can then consider its options later when there is more clarity around the potential use and applications.

The Applicant Guidebook published by ICANN makes provisions for basically two types of gTLD applications, community-based and standard applications. The apparent appeal of a community-based gTLD is that in the event of multiple applications for the same name string, a community-based applicant may have the option of electing a community priority evaluation. On the outset, the difference seems subtle and could be satisfied by a creative interpretation of “user community”.     

As an example, a brewery might in fact serve a large “community” of beer drinkers. But that alone would fall short of meeting the full intent of the ICANN’s requirement for dot beer (.beer) to qualify for a community-based gTLD designation. According to the Applicant Guidebook, community-based applications are “intended to be a narrow category for applications where there are unambiguous associations among the applicant, the community served and the applied-for gTLD string.”  To be eligible for a community-based application, the applicant must be able to substantiate its status as a representative of a clearly delineated community. Further, supporting documentation in the form of community endorsement must accompany a community-based application.   

A litmus test to consider a community-based designation would be to ask whether the operation of the proposed gTLD is for the benefit of the defined community rather than the applying entity. Only if the answer is definitively “yes” would exploring a community-based application be worthwhile. Community-based applications will likely undergo a very thorough review by the evaluators to ensure each application meets the requirements for the designation. A single for-profit entity would likely find it very difficult to state its case for a community-based gTLD designation. Trade associations, certain consortiums, and social and ethnic organizations that exist to represent the members of the “community” will be the likely candidates for the community-based designation. 

Even if multiple organizations apply for the same name string, the outcome doesn’t necessarily have to be an “all or nothing” proposition decided by the highest bid. Where companies from different industries apply for the same name string, an option to explore could be an arrangement between the parties to partner in the gTLD.  The more applications there are for the New gTLDs, the greater the possibility of potential name string contention.  This has the potential to become a more significant issue in each subsequent application round.  A thorough analysis of the advantages in applying in the first application round should be a key factor to take into account when considering a New gTLD and when to apply.

More companies are giving serious consideration to a .brand now that a definitive timeline for New gTLDs has been established by ICANN.   There are a number of strategic factors in determining if a gTLD is warranted, with significant weighting on an organization’s brand and online marketing strategy. The below statistics compiled from organizations which have expressed interest to Melbourne IT DBS may provide a high-level benchmark for comparative purposes[i].

Of B2B and B2C companies, consumer facing companies are the most interested in a .brand (65%).  Across both groups, 92% are interested in applying for their primary brand, and 9% for a product brand(s).  11% indicated interested in applying for a generic term.

The purpose for applying is nearly evenly split with 48% considering an application primarily to protect the brand and 45% to create a competitive marketing advantage.

The most interest by industry segment is:

• Entertainment, publishing and media industry (19%)
• Financial services (19%)
• IT and Telecom (15%)
• Travel and tourism (7%)
• Consumer goods industries (7%)