The biggest change to the domain name system in over ten years is now underway.
In June last year, ICANN (the body that governs the domain name space) announced its decision to remove the restrictions around the number of generic top-level domains (gTLD) allowed.
A gTLD, is represented by the letters that come after the last dot in a domain name, such as .com and .net. Under ICANN’s new rules, anyone can now apply to create and operate a domain name registry for a new gTLD.
We will soon see websites ending in .nike or .ibm or .ford or .virgin or .yourbrand instead of .com. Generic words could also become domain name endings, such as .hotel, .shop or .casino.
It’s only a matter of time before we see marketing of websites such as www.911.porche or www.hilton.hotel.
Available email addresses will expand too, such as steve@ipad.apple or megan@pwc.accountant.
The window to apply to own and operate a domain name registry opened on 13 January 2012 and closes on 29 March 2012. Once closed, it is unlikely to reopen again for four or five years (if at all).
ICANN expects between 500 and 4,000 applications for new gTLDs, and is geared up to process 1,000 applications a year. The application process is expected to take a long time, and applying does not guarantee success. Industry experts are predicting at least 1,000 applications for new gTLDs.
Understanding the new gTLDs
Broadly, there will be three new types of gTLDs:
for brands, such as .harveynorman or .tooheys
for generic terms, such as .movie or .lawyer or .mail
for geographic places, such as .sydney or .queensland or .newzealand
New gTLDs do not have to be in English.
Opportunities for owning and operating new gTLDs
If you are a brand owner, you could apply to own .yourbrand. Ford, for example, could then have website addresses such as www.buy.ford and www.service.ford and www.contact.ford and www.falcon.ford. The owner of a gTLD can control who can register and use domain names with that ending. For example, the brand owner could limit domain names ending in .yourbrand to its own use or for staff and distributors. Or the brand owner could give or sell domain names ending in .yourbrand to its customers.
A number of entrepreneurs are applying to own new gTLD registries for generic terms. Their hope is that businesses or consumers will want to purchase domain names with that ending. For example, florists may want to buy and use a domain name ending in .flowers. The florist could then have a website with the address www.manly.flowers or www.wedding.flowers. Or a sports fan may want a domain name and email address ending in .cricket, just like a vanity car number plates.
Only if you have appropriate government backing can you apply to own the registry for a geographic place, such as .melbourne or .paris.
In short, brand owners should now consider registering their key brand as a new gTLD before the window shuts. Once new gTLDs are established by others, brand owners will have to consider protecting their brands in each of these new gTLD registries.
The business case
For many brand owners, it will be a good business decision to own and operate a new gTLD registry.
The new gTLDs will give business the opportunity to show leadership in online marketing and innovation. For some brands, this will be important.
Brand owners should now consider registering their key brand as a new gTLD before the window shuts. Once new gTLDs are established by others, brand owners will have to consider protecting their brands in each of these new gTLD registries.
The marketing possibilities due to the new gTLD expansion are enormous.
If done in a sophisticated way, operating a new gTLD could be a great way to connect with customers. For example, if every person who buys a BMW car is given an email address, such as peter@525.bmw or peter@perth.bmw, this provides a strong customer link. Or each Qantas Frequent Flyer could be given their own secure website, such as www.billbrown.qantas, that has information about their membership and future flights.
Also, registering your brand as GTLD will be a strong way to protect that brand, and will give the brand an immediate global presence.
Owning a gTLD gives the brand owner control over use of all domain names, websites and email addresses in that gTLD space.
Considerations
There are costs and risks to be considered.
First, there are the financial costs – an application fee of about $185,000 payable to ICANN by 12 April 2012. And not all applications will be successful. If two organisations apply for the same gTLD, such as .sydney or .abc or .car, there will be an auction to determine who will own the gTLD. Some gTLDs are expected to sell for significant amounts in these auctions.
Plus, there will be operating and compliance costs in running a gTLD registry. Experienced Australian domain name registrars, such as Instra and Melbourne IT, have services to assist brand owners and advertising agencies register and operate new gTLDs. See, for example, www.newtlds.com.
Second, many are unsure whether there will be customer acceptance of these new types of domains.
Third, for brands that already have a strong online presence and branding, a change to a new gTLD could confuse consumers and dilute the brand.
Fourth, in relation to corporate identity, the new gTLDs put the brand last, not first, which is against current convention.
Many brand owners will feel forced into applying to operate a new gTLD registry for their key brand for fear of missing the window or being left behind, even though today they have no clue as to why they should do it.
If your competitor is operating a new gTLD, should you do it too? What benefits will arise in the future from owning a GTLD? Remember that in the early days of the internet, McDonalds saw little benefit in owning mcdonalds.com, and it was registered by a cybersquatter. A few years ago, one would not have imagined that businesses such as Facebook and Twitter would become an important part of a marketing campaign. The marketing possibilities of owning a new gTLD have not even been considered by most businesses today. There is no doubt that in a few years’ time, many brand owners will be regretting their decision not to register a gTLD by this March.
There is no doubt that the introduction of new gTLDs will bring about a monumental shift in internet navigation, marketing and use.
This publication is based on an article published in B&T Magazine. Click here to view.