The new .brand TLDs are destined to fail…

by Edwin on October 21, 2011

(I wrote this originally in a slightly different form as a comment in response to the MarketingWeek article “The new domain names that will be a game-changer for brands” but I felt it deserved a more “permanent” home.)

For most brands, trying to establish their .brand in the minds of consumers will be like trying to drain the ocean with a drinking straw.

What most articles about the new top level domains (TLDs) fail to address or glibly gloss over is the fact that there are millions of existing .co.uk and .com websites that have been, are being, and will continue to be advertised and marketed by their owners, be they large corporates, SMEs, non-profits, individuals or other entities.

The owners of all these domain names have together spent hundreds of billions of pounds over the last 15 years burning into our collective consciousnesses that “a domain name (web address) is something that ends in .co.uk or .com”.

Talk about branding. “dot co dot uk” and “dot com” have brand recognition that a McDonalds or a Coca Cola marketing executive couldn’t conceive of in their wildest dreams, let alone bring themselves to believe they could one day emulate! It’s only because they’re not “owned” by a single entity that these expressions don’t head the “top UK brands” list year after year.

And it’s not just about online advertising – far from it. Every time a web address appears on TV, in a newspaper or magazine, on the side of a bus, on a billboard, on a tradeshow display, in a brochure or leaflet, on an invoice or letterhead, on a business card, as part of an email address, or in hundreds of other forms, it’s serving to reinforce those 2 giga-brands: “.co.uk” and “.com”.

This pent-up momentum in favour of the status quo will not be overturned by a .brand, no matter how large the company backing it. People often talk about winner-take-all monopoly scenarios in particular markets. Well, “.com” and “.co.uk” have just about as close to 100% mindshare as it is possible to get.

A string such as menu.mcdonalds will simply not be recognised as a web address by the vast majority of people who see it, and it certainly will be less memorable than the current method of going to mcdonalds.co.uk (the “instantly obvious” place to find information about McDonalds in the UK) then looking for the “Menu” link. At best, it will be considered a typo. At worst, it will make no impact of any kind.

ICANN is pulling out all the stops to market the new TLD concept, and it’s easy to see why. Here’s an organisation that’s collecting approximately US$0.25 a year from each .com registration, faced with the prospect of banking over half a million times as much (US$185,000) as an up-front fee in one fell swoop, for a single new TLD. And the ICANN annual renewal fee of around US$25,000 per new TLD is the equivalent of what they bring in from 100,000 .com renewals.

Put another way, ICANN only has to sign 1,000 brands up to the concept of getting “their” TLD to set up an annual revenue stream equal to all the revenue it’s currently pulling in from the 100,000,000 .com registrations.

No wonder they’re pounding the drum on this so loudly! What’s not to love, from their point of view?

Marketing agencies and brand consultants love the idea as well, because they know it will be an excuse for their clients to spend billions on trying (and – whisper it now – failing) to rebrand their web addresses. And there will be relatively little comeback if they “fail” because each brand will be executing its own unique strategy to promote its .brand, so when things fall apart it will be impossible to set up a straight “apples to apples” comparison with other companies working on their .brand promotions, thus negating any chance of finger-pointing.

However, it’s time to face reality. Global .com alternatives such as .info and .biz have been around for a decade, yet have failed to gain significant recognition despite having a combined registration base in the millions. More recently, extensions such as .mobi have appeared with great fanfare and excitement, then effectively disappeared from view again, without eliciting as much as a shrug from the majority of consumers who have remained oblivious to their existence.

And so it will come to pass for .brand extensions too. The questions any organisation considering a .brand strategy needs to ask itself are these: “Are we ready to flush millions of pounds away trying to hold back the tide, or will we heed the lessons of internet history and past TLD introductions and stand aside, while we watch our competitors squander their resources? Do we continue to promote our existing web address, which we have pushed in every piece of marketing we have done over the last decade or more, or do we throw all that momentum on the bonfire that is .brand?”

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Companies Prepare for Land-Grab of New ‘Generic’ Top-Level Domains | newspower.eu
January 14, 2012 at 3:41 pm

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Ty October 21, 2011 at 10:05 pm

You put forwards a compelling case Edwin, but I don’t agree with you at all.

Sure, .something domains have historically failed because their business model was based on selling subdomains to 3rd parties, eg yourdomain.something. I don’t think that anyone can say what would happen if an offline or online global “superbrand” took a .brand domain as it’s namespace – no selling subdomains, purely as a mechanism to control their image and marketing online.

I don’t think that end users would have a problem visiting uk.coke or i.google or books.amazon or http://www.ebay or whatever if enough advertising money was chucked into getting the idea across.

As I see it, the truth is that it’s not been tried yet, so no-one can really predict what is going to fail or succeed, any more than one can predict which websites are going to take the world by storm and which are going to fall by the wayside.

Also, if .co.uk and .com are as dominant as you make out, how have domains like police.uk, nhs.uk or subdomains on org.uk and gov.uk managed to get any traction?

Interesting subject nonetheless.

Ty

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Charles Christopher October 22, 2011 at 4:45 am

Nice article.

I don’t agree with some of it, but it really comes down to the ICANN issue for me and their financial conflict of interest, and their being the controller of the internet.

It was once claimed that one of ICANN responsibilities was fostering competition. From my view I mostly see the opposite.

I’d like to see unlimited expansion of TLDs, let them die or succeed on their own via an alternative root system. We have a monopoly structure in the current TLD hierarchy and it impedes competition, creativity, and innovation. I’d like to see the return of a true “incubator” environment where anybody wishing to take a chance can do so with virtually no barrier to entry, ICANN being a key part of that barrier.

Innovation is not clean and pretty, it’s generally ugly and chaotic.

Just look at what the internet has done to the retail industry and the media industry. These industries decided not to get involved with the internet early on and those that did are now eating their lunches … As it should be.

So I’d like to see some “chaos” related to new TLDs, with the current TLDs “protected” in the current structured framework and thus “competeing” with creativity that occurs in a barrier free alternative DNS system or systems. Alternative DNS systems with NO COMMON CONTROL POINT OR AUTHORITY.

I’d like to see a return to true competition, creativity, and innovation.

It’s not for us, OR ICANN, to say someones idea is good or bad. Let eveyrone test themselves, and their ideas, freely.

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Edwin October 22, 2011 at 10:21 pm

“Also, if .co.uk and .com are as dominant as you make out, how have domains like police.uk, nhs.uk or subdomains on org.uk and gov.uk managed to get any traction?”

Good question. They’ve gained what traction they have (and how much mindshare do they really have in the minds of “ordinary folks” anyway?) by being the “official” default of very large institutions, in most cases.

.police.uk is the official extension for local and national police forces

.nhs.uk is used by all NHS hospitals and affiliated institutions (and is painted on the side of all ambulances)

.gov.uk is the official extension for central and local government departments and ministries.

So in all the above examples, the choice of the extension – and hence what gets promoted – was “forced” on entities within that sector as a matter of policy.

.org.uk is the extension of choice for most charities and non-profits (as of course it was always intended to be, before it got co-opted as something of a default fall-back for any entity unable to secure the more desirable .co.uk)

None of the above edge cases take anything away from the COMMERCIAL dominance of .com and .co.uk.

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gpmgroup October 22, 2011 at 11:16 pm

I don’t think that end users would have a problem visiting uk.coke or i.google or books.amazon or http://www.ebay or whatever if enough advertising money was chucked into getting the idea across.

People will have to know and remember both the sub domain and the domain which is step backwards from domain.com

Also ideal subdomains from a users perspective are often not naturally aligned with [ internal] business operations.

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RH October 29, 2011 at 10:27 am

You make excellent points Edwin. I think the .brands don’t matter as much as the generic tlds like .web or .shop.

For domainers they had no rights to any domain that uses someone elses brand.

The early success of .xxx shows that the right tld can work for at least the best keywords. Not many will duplicate that success IMO.

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Edwin October 29, 2011 at 2:17 pm

It’s important to consider how you define “success” in the domain industry.

The .xxx extension has already made a pot of money for ICM Registry LLC (especially when you see the side deals they made prior to Sunrise for some of the top generics) but there is no evidence that it’s gaining any traction in the market as far as actual use is concerned, nor would I really expect it to, given that it was strongly opposed by the adult industry prior to launch.

So is a new TLD really “successful” if the only people it makes money for are the registry running it and perhaps a few early adopters who flip their names to latecomers piling into the extension to get a piece of the action?

Or does there have to be a widespread recognition and acceptance of the extension itself by the “wider world” – i.e. the folks in the street – for it to be a success?

I’d argue for the latter, as the narrower version of “success” is basically predicated on selling a product that no actual end users want (a “take the money and run” strategy), which has strong negative repercussions for the reputation of the domain industry.

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Ann Kuch October 29, 2011 at 6:28 pm

I simply do not understand why people keep claiming that .xxx has been a huge success. Do the math. According to their own reports, ICM spent $14,000,000 getting the sTLD. They’ve spent $5,000,000 on marketing/advertising. They’re contract with McAfee is for $8,000,000. $2 of every domain sale goes to ICANN and $10 from every domain sale goes to IFFOR. That means that ICM has spent over 27 million dollars just to get up and running (and these calculations do not even take into account their operating expenses.) According to ICM, they have grossed $10 million. Where is the success?

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RH October 30, 2011 at 5:40 pm

Ann they are not even live yet, they are off to a good start.

Edwin
Failure needs to be defined, and a failure for who ? At the end of the day its all dilution.

If someone wanted a .com and the asking price was $10,000 and they could get the keyword in .shop if that made sense for them for $100, then its not a failure for the registrant. Not a failure for the registry or the registrars.

If .xxx is a failure, then I know a lot of people who want to fail like that.

So the new tlds could be a failure for domain speculation and investing, that is just one part of the equation.

Is the value of PalmSprings.com hurt ? Imo NO, is the value of what most domainers own diluted ? Imo Yes.

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Graham Schreiber May 25, 2012 at 10:13 pm

Hi Edwin:

I would agree that .brands will not succeed; and that it’s a huge cash grab, for ICANN.

My I share some advise …. although it’s unproven in Court, AS YET, I recommend that all those concerned, should own an IANA Root listed & ICANN accredited ccNSO domain name, to protect themselves, against a .brand intrusion.

Primarily, own the:

.COM & .NET ~ VeriSign Global Registry Services, Virginia 20190.
.ORG ~ THE PUBLIC INTEREST REGISTRY, Virginia 20190.

ICANN ~ Washington, DC. Perhaps not ‘Head office’ however, it’s the office located beside their masters, the US Department of Commerce.

Contract a web-hosting firm in this municipality; and keep your FTP files & emails, active from within this Municipality, then Your businesses will enjoy **I Believe** Common Law Rights, or States Rights, 1st in Use, etc, etc.

Doing this will make a USPTO Trademark easy; within the classification structure, and from there be / get involved with the US’s other trademark treaties. **This is supposed, as yet**

Once the above is secured, NOBODY can get ‘your business name’ with a dot Brand, if your bona fide and doing business. The exception being a business with your name, competing in a different USPTO classification.

One might buy a .brand, from some sales agent outside the United States; however, the sales contract of the .brand, will be governed from / by / within the USA.

Notice the addresses! They all fall under the laws & protection of US Federal District Courts, Eastern District, Alexandria.

Pro Se fee $350.00USD compared with WIPO at $1,453.00USD, for a starting fee.

For the many small, home based, global business entities like mine, this is the best way to secure protection.

For the record; my knowledge is driven by a Contributory Infringement / Dilution case, that I’m preparing, as my business has been adversely impacted, by an unsanctioned cc.TLD, in the United Kingdom.

The opinions given are not of a Lawyer, nor do they represent legal advise, they are solely the findings of my research & interpretation of the Internet, US Laws, bumpy life lessons, etc, etc.

Cheers, Graham.

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James Coakes June 10, 2012 at 5:27 pm

I think we’ll see them run side by side for a while. We’ll see the .cokes used in marketing and promotions and the .coms used in a more corporate administrative sense ultimately. These corporates have a huge infrastructure and any upfront or running costs are a drop in the ocean.

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