From 12 January 2012 brands and businesses can apply for their own 'dot-brand' top-level domain names. Stuart Durham of Melbourne IT Digital Brand Services, who advise companies on the issue, talks to Figaro about the pros, cons and long term implications of a significant change in the internet's infrastructure
Just how important is your address? If you're a brand or business operating in the teaming global marketplace, your url serves as gateway, shop-front and signpost. From searchability and marketing effectiveness to security, prestige and consumer trust, a whole lot hangs on that unique character string. For over 20 years, brands – like everyone else – have had to sit behind the dot. But this year a process gets under way which will eventually result in urls which take the brand new form '.brand'.
The application window for businesses hoping to see their names on the right side of the dot opens on 12 January and runs until 12 April. The Internet Corporation for Assigned Names and Numbers (ICANN) - the body set up to maintain the stable running of the net - will then undertake an evaluation period of between nine and 20 months. This is not, however, something to be entered into lightly. To apply for a dot-brand top-level domain name (TLD) involves an evaluation fee of $185,000 and significant subsequent operational outlay. There's a 325-page guide book to digest and applicants must provide detailed responses to 50 technical and commercial questions.
Joining the dots
The previous ICANN TLD overhaul – seven years ago – resulted in seven new suffixes. This time anywhere between 500 and 1,500 applications are anticipated, and we can expect to see addresses such as 'drink.coke' or 'drive.ford', as well as generics like 'buy.music' and 'goto.london'. Regardless of whether businesses decide to splash out on what's being called the ultimate piece of online real estate, this is a significant development in the net's evolution.
"Brands and marketers need to make sure this is right for their business and their objectives," says Stuart Durham, EMEA Sales Director at Melbourne IT Digital Brand Services, who offer guidance to brand owners. "Is it a tool they need to put in their toolkit? For some it will be, for others it won't. But even if it's not, the new format will have a knock-on effect on other aspects of strategy, and how tools are used."
Sheer expense means the option isn't going to be open to everyone. But, explains Durham, the TLD space has been liberalising for some time. "Since 2000 there have gradually been new top-level domains coming in. We now have 22 or so generic TLDs - .travel., .mobi, .info, and so on. We also have, let's say, 280 country-code top-level domain names, though there are actually many sub-levels beneath that, such as .gov.uk, co.uk and so on. It's really making the internet more fit for purpose. Businesses and users nowadays don't feel constrained by geographic extensions. We tend to look at the values or attributes of businesses or brands."
Long term commitment
As has been acknowledged elsewhere, there are risks associated both with going for a dot-brand domain name, and with hanging back. With the next ICANN application window likely to be at least four or five years away, brands who get on the right side of the dot now will be hoping for a serious steal on their competitors. But it's a long-term commitment, no one's entirely sure what the return will be, and those who don't bid this time round will be making careful notes on any mistakes those early adopters may make.
"It's a commitment and you're signing a 10 year contract," says Durham. "Yes, you could break out early, but you have to go in thinking about it long-term." Assuming there are 1,000 domain names under the TLD, Melbourne IT Digital Brand Services estimate the annual running cost for successful applicants will be $125,000. And that's on top, remember, of the initial $185,000 application cost. Realistically, says Durham, taking on a dot-brand right now probably means a million dollar spend. So who might benefit, and how?
Pros and cons
Durham and the team at Melbourne IT Digital Brand Services have identified five key issues that brands need to consider. And while all five may not apply to everyone, he says, there are few cases in which none of these criteria are relevant.
"The first is IP protection. If you know you've got a very generic brand or trademark, or that you have shared intellectual property – think of 'Continental' which applies to the airline, the hotel chain, the tyre manufacturer and so on – this could be important. There may be four or five companies out there that have valid IP rights, because you can have the same trademark in different classes. But there can only ever be one '.com'. If you know you have IP rights challengers, from a defensive standpoint this may be worthwhile. But the flipside is also true. If you have very clean, clear IP ownership around the world, maybe you don't need a new TLD."
Brands also need to think about the broader connotations of a prospective TLD. Melbourne IT themselves, for example, probably wouldn't get very far using the abbreviation MIT. "We could probably apply for MLB," says Durham, "which forms our ticker on the Australian stock exchange, but Major League Baseball might be a bit annoyed." In cases where more than one company applies for the same name, and where agreement over ownership can't be reached independently, ICANN will put the bid to auction, a process that will involve significant additional expense. "Businesses also need to understand that just because a name doesn't appear in the trademark register, as may be the case with abbreviations, acronyms and so on, that doesn't mean others don't have equally legitimate rights to it."
Trickledown trust
The second potential advantage of a TLD, says Durham, lies in improved marketing effectiveness, either through SEO or direct navigation. We'll have to wait and see what the precise impact here will be. "But," he says, "Google exists to return the most relevant data to what you are searching for. The domain name, the url, is part of that. If you have, for example, '.canon', you can create anything you like to the left-hand side of that. So those keywords that your target audience are searching for, you can replicate as urls."
A further potential advantage lies in brand positioning and user perception: there's a clear prestige value associated with a branded TLD. Allied to this are issues around trust, security and authenticity of information. Trust, in fact, remains one of the biggest issues for UK consumers. Recent research by YouGov indicates that 84 per cent of consumers believe brands should be taking greater action to help consumers identify authentic brand sites, and 51 per cent said it can be hard to verify a site's authenticity. A dot-brand domain name could be an effective way of addressing those concerns, particularly for banks and other financial service providers, where consumer trust is a powerful asset.
There's also the potential for a trickledown effect as TLD-holders in the consumer or luxury goods sectors choose affiliates – effectively second level domain name-holders – who can benefit from the sense of community focussed around that TLD. But with so much energy and emphasis now directed towards social media in general and Facebook in particular, for how long will TLDs really be relevant?
Do names still matter?
"People almost expect to go to a site and see that Facebook–style dashboard now," acknowledges Durham. "Some companies that we've spoken to are looking at TLDs as a new application-type of opportunity – does it help them to do their social media activities better by providing, for example, a personalised 'stewartdurham.canon'. My own personalised space for what I've bought, complete with warranties, my product information, even my photos. These are all things that can be done today, but can they be even more personalised? Is it something that's going to give you an added ability?"
One issue with social media, of course, is that brands are reliant on someone else's infrastructure and technology. Facebook reigns supreme right now but strategies change, platforms evolve and eventually users move. "These are things outside your control," says Durham. "And we do see it happening. In China recently they decided to change their rules. Most registries tend to liberalise and make things easier, but sometimes they go the other way. So in China you had people who'd registered .cn domain names who then had to provide information which they'd never had to do before."
Social networks like Facebook are unlikely to commit business suicide but, acknowledges Durham, they do have final control over their platforms and how they work. "And let's face it, there are over 300 social media sites which are very different from region to region. A TLD could represent an opportunity to have a global, central link to all of your consumers so that your brand is represented consistently, yet you maintain that local - or 'glocal' – connection."
Exactly what these TLD changes will mean in the long run remains to be seen. Dot-coms aren't going to vanish and consumer behaviour won't change overnight. Given the expense and commitment, right now this is something of an experiment for the big boys rather than an option open to everyone. Some have expressed anxiety that this will create a new online hierarchy. For others it's an expensive first step in a process which, eventually, will be open to everyone. But the new format does bring the potential for greater flexibility, more personal interaction and deeper engagement. These new TLDs represent a key to the door. Marketers will be keeping a keen eye on who makes best use of the space.
Article by Jon Fortgang