The expanding internet: what’s in a name?

Thousands of new alternatives to dotcom web addresses are starting to roll out across the internet. But how significant are they and are they worth the big expense for brand owners?

The internet will soon be flooded by web addresses with an unfamiliar look – alternatives to the ubiquitous .com such as .book and .beauty. Since the end of last year, over 100 new options have been announced, and this month the first of them opened registrations for new websites.

Brands applied to create nearly 2,000 of these ‘generic top-level domains’ (gTLDs) in 2012, after the Internet Corporation for Assigned Names and Numbers (ICANN) – the US non-profit body that oversees web addresses – removed restrictions that had limited them to 22. David Green, head of global digital marketing at professional services firm KPMG, says the changes “could have as profound an impact as the invention of the worldwide web”.

Companies that own gTLDs can sell or give away addresses within the domain, or use them to promote their own goods and services online. They are limited only by their own vision. “Brands such as Amazon and Google had a clear understanding of the benefits of operating their own registries,” says Green, suggesting the web giants could sell web addresses to other companies. Google applied to create 101 domains including .ads, .baby and .blog, while Amazon applied for 76.

Green adds that ICANN’s move “will unleash a wave of innovation in digital delivery of services”. He says .kpmg will replace kpmg.com as his company’s primary online home. For a firm that operates in over 150 countries, many of which have no preference for .com addresses, the upsides to being able to index all its online content under a globally relevant domain name are obvious.

It is not only the fact that naming it after the brand makes the firm easier to find and remember that excites Green. He also points to the operational and technical advantages in owning a “massively scalable” database on the web.

ICANN’s reasoning for opening up the domain naming system is that the choice of top-level domains had become too limited in an increasingly digital world. Given that this is the first time brands have had the opportunity to request their own, most applicants are cagey about their plans.

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.london hopes to attract SMEs and large corporates including the ExCel centre (below)

But electronics company Philips willingly acknowledges the benefit of being involved in the first wave of new gTLDs. Ingrid Baele, of Philips intellectual property (IP) and standards, points to three key advantages: the ability to create a “genuine” or trusted environment online; the creation of new business or marketing opportunities; and the avoidance of a risk that others might apply for a domain with the same name as your company.

She says that as Philips recently relaunched its brand with the new tagline ‘Innovation and you’, applying for a top-level domain seemed a timely way to illustrate how the company is willing to define its strategy “ahead of the race”.

Philips has also applied for the Chinese version of its name, as the internet overhaul marks the first time web addresses can be composed of characters from non-Latin alphabets.

According to ICANN president of global domains Akram Atallah, one key motivation of the gTLD scheme is to increase engagement with the web globally as many emerging markets come online for the first time. Indeed, launching these addresses is being prioritised ahead of additional Latin-alphabet domain names.

But while some multinationals can afford the price-tag of an application, $185,000 per domain name, legal and consultancy costs take the total outlay to a minimum of $500,000 per domain. Jan Corstens, a senior partner at Deloitte, says: “I don’t think that under $500,000 to $600,000 it is possible to secure a gTLD.”

Corstens is also project director at ICANN’s Trademark Clearinghouse (TMCH) – the IP protection mechanism set up to help brands protect their trademarks online. Its lead consultant, Jonathan Robinson, has noted a shift towards domains being seen as a brand asset rather than something that is handled by the IT department, or an IP issue. Slowly, brands are waking up to the potential marketing implications of new domain names.

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“They are the cornerstone of a web presence and key for navigation,” says Robinson, who admits that awareness of the programme is lower than it should be.

“The internet is changing rapidly and vastly,” adds Corstens, who explains that Deloitte, like KPMG, applied for its own brand name in order “to have everything under the same umbrella”.

“Historically, there have been issues when looking for an interesting domain that might work on a global level; it can be expensive and difficult,” he says. “Because Deloitte offers so many different services, owning our own domain may allow for easier navigation for the end user.”

But smaller companies, and those that miss out on their choice of gTLD, need not fear that a slice of the action is beyond their means. There are going to be many opportunities to register second-level domains. Amazon, for example, might have to make do with amazon.book after it was denied the right to own .amazon following objections by Brazil and Peru, where the Amazon river flows.

Once the first wave of new web addresses have had time to settle in, it is likely that a second round of applications for new top-level domains will be invited. However, according to ICANN’s Atallah that will not happen until 2016 “at the earliest”.

Stewart Willes, marketing manager at specialist ‘balance bike’ manufacturer Kiddimoto, says that his company is pre-registering for the second-level domain wheelworld.reviews. It had originally applied for balance.bike, but lost out because a successful trademark application was made by another company.

Using one of the new gTLDs is about being user- friendly and attractive to your audience, says Willes. “It’s becoming a struggle otherwise; we’re running out of available .com and .co.uk addresses. Marketers will have to think creatively and check the availability of domains,” he adds.

The main reason for pre-registering the name wheelworld.reviews was speed. “It’s about getting hold of the domain quickly. We were originally going to forward traffic to our .co.uk site, but we wanted the domain. It’s important to secure these domains before your competitors do.” Willes believes that any scepticism about the benefits of buying a new web address will fade quickly. “It’s like when cameras were put into phones. Some people said ‘why do I need a camera in my phone?’ Now, everybody has one.”

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Kiddimoto is pre-registering for the second-level domain wheelworld.reviews

That said, the potential impact of the new gTLDs is unclear. Despite a few high-profile media stories – the announcement of .london’s launch this summer, for example – consumer awareness of the roll-out is fairly low, even though it might increase as addresses within the domains go on sale. Much depends on how well the gTLDs’ owners market second-level domains, as well as on the number of household names that succeed in creating their own top-level domain.

Some claim that many brands have applied for them – at considerable cost – without a strategy in place. ICANN has said it received far more applications than it had anticipated. Others have justified their investment by basing a business model on securing a gTLD, such as Steve Machin, who applied for .tickets. He wants to create a domain that assures buyers of event tickets that they are on a bona fide site. But it has been no small task.

“We have been working on this for nearly two years and do not expect the ICANN process to end until the summer,” he says. “We are in competition with four others for .tickets and have invested just under $1m so far. But you don’t get these chances very often. It’s about creating a part of the internet.”

He points out that, although .com is relevant in the US, elsewhere it is often the specific country code that is used. “In Ireland, addresses tend to be .ie and in Germany it’s .de. So .com doesn’t have the relevance outside the US that people think it does,” he says.

Many also believe that there will be a gradual shift away from country codes and .com towards more specific or relevant gTLDs. Machin says that if .london is successful in attracting interest, it should make it easier for consumers to take to .tickets, as the education process will already be underway.

Gordon Innes, chief executive of London & Partners, which runs .london, has had authorisation from ICANN, says that one of the key benefits of the new domain is relevance and the fact that it is likely to be shorter and memorable than alternative URLs.

He predicts that the hundreds of thousands of SMEs in London will be the main buyers. “This reflects the phenomenal size and growth of our internet economy as well as new opportunities  and space for growth. The .co.uk or .com addresses can be limited or very expensive.”

As a company, .london is in talks with household names, such as Selfridges, Claridges, and exhibition and conferences company ExCel. “An address like this can be powerful and convey a sense of trust and legitimacy. Some will take leading positions and they will enhance their reputations. They will be more readily searched and found,” claims Innes.

Keith Clifford, ExCel’s marketing manager, explains the reasoning behind his own interest: “Often we sell London first before we sell the venue. We are tied to our geographical location. This is great for marketing as brand London is often stronger than brand UK.”

He does not believe that the smaller companies have been priced out of the potential opportunity, however, as second-level domain names cost a fraction of the price of owning and operating a gTLD and some can be picked up for around £10.

“You have got everything from geographic to financial terms, to .camera or .photography,” says Clifford. “It’s up to businesses to pick one that is most relevant to them.”

Amazon and Google might have invested tens of millions of pounds in the gTLD process, but its implications could be far reaching for brands big and small.

Sponsored viewpoint: Stuart Fuller

Director of commercial operations and communications , NetNames

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The number of applications for new ‘generic top- level domains’ (gTLDs) took everyone by surprise. There were 1,930. The largest new registry is called Donuts, which applied for approximately 300. It will not necessarily get them all – some are in contention, such as .rugby.

Some brands pulled out of registering new domains because they had done it for the wrong reasons. It needs a strategy behind it or a domain name can fall into the wrong hands.

Barclays is one applicant we have assisted. It has applied for .barclays. Its strategy is “if it hasn’t come from .barclays, it hasn’t come from us.”

For small businesses this is an amazing opportunity to secure domains that are relevant and memorable, as opposed to expensive .com addresses.

A lot depends on how search engines handle gTLDs. Google says that keywords to the left of the dot must be relevant and up to date. We do anticipate that there will be a second application round a few years down the line. Everybody needs to build a strategy over the next couple of years, because more will be launched.

In terms of ‘second-level domains’, look at the generic names that are available, then decide which are relevant and what to register beneath the name. From a brand holder’s view point, it is a minefield and where do you draw the line?

Do you need to buy adidas.plumbing? Maybe not, but if it falls into the wrong hands, it could cause problems. Digital marketers may see something that IP or trademark teams don’t. Some brands are missing out on things that could be important.

The .sucks domain is a major concern due to what we call ‘gripe sites’. It would be difficult for a business to take down such a site and applicants know this. It is forcing brand holders to defensively register their names, to prevent someone setting up yourbrand.sucks, for example.

Our advice is not to defensively register trademarks in every new domain, which is costly, but to choose the right names for your business. These could become relevant in the next six months to six years, if users become savvy to this new naming convention. Instead of seeing it as a threat or an extra cost, brands could turn this into something they are glad they secured.

We are only advising people to use the Trademark Clearinghouse (TMCH) if they intend to register domain names. If a small company tries to register 30 trademarks with the TMCH this could involve excessive spend. But the TMCH is a vital first line of defence for brand holders. We have seen cybersquatting happen already – even in the first few days of releases.

The legal view

Intellectual property (IP) lawyers claim that the cost of applying to create new alternatives to the .com web address has put many clients off.

Kate O’Rourke, senior counsel and IP lawyer at Charles Russell, says her firm received many queries when the application phase for new ‘generic top- level domains’ opened, but that even beyond the cost of making the application, there is the huge cost in running one.

She says generic terms rather than ‘.brand’ domain names will be most successful, at least monetarily. “They are then selling the opportunity for companies to secure the likes of superdry. clothing,” she explains.

“We still don’t know what the impact will be, particularly with brand names. Will people want to go to .tresor instead of tresorparis.com? But so many have invested so much, that there must be some advantage.”

Theo Savvides, partner and head of IP at Osborne Clarke, says the biggest legal issue is “the potential monopolisation of generic terms”. Many were not permitted by the screening process, but if any company succeeds in securing the rights to .game or .movie, for example, it can expect the financial rewards of selling addresses within those domains to be huge.

Econsultancy best practice: David Moth

Deputy editor, Econsultancy

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The decision to roll out new generic top-level domains (gTLDs) has been met with negativity from marketers, mainly because businesses are unsure about how to react.

A 2013 consultation by Nominet into the use of new .uk domains found that two-thirds of the people and businesses involved in the survey were “for the most part against the proposal.”

The main concerns were the extra cost for registrants, confusion for end users and the perception that there was no value in it.

When factoring in the challenges faced by the introduction of more than 1,000 new gTLDs, it becomes more of a headache for marketers.

Before the introduction of the new domains, internet users in the UK were generally exposed to .co.uk or .com. But now there will be hundreds or even thousands of potential domains for people to remember.

I don’t think it will cause too much of a problem for consumers in the short term as the roll-out is likely to be slow at first, although there will no doubt be a few businesses trying to grab a bit of PR exposure by being among the first to adopt a new domain.

Internet users are not going to forget websites they have been using for years, just like Google is not going to suddenly drop sites from its index in favour of the new domains.

The potential costs of the roll-out are a valid concern as businesses need to decide whether they want to establish a presence within one or more of the new gTLDs, as well as being wary of the renewed threat from cybersquatters.

As the owners of each gTLD are able to dictate their own prices, this could become a very costly exercise.

Ultimately though, the new gTLDs are necessary if the internet is going to continue to evolve.

In a recent interview with Econsultancy, head of ICANN’s generic domains division, Akram Atallah, said that the roll-out was about consumer choice.

The reasoning is that memorable domains are becoming scarce, which is harming competition and causing new businesses to come up with longer and more obscure names.

Atallah says the expansion is not about existing domain holders but emerging SMEs and the next generation of internet users that will soon be coming online.

As the process is going ahead whether businesses like it or not, those that continue to innovate and embrace the change are likely to be those that come out on top in the long run.

But for the time being most businesses seem to be adopting a wait-and-see approach, which I think is certainly the wisest course of action.

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