NEW gTLDS ROUND 2
WHAT LESSONS HAVE
WE LEARNT FROM
ROUND 1?
APRIL 2016
INTRODUCTION
“More companies than last year now see the internet as
a profitable way of making sales, compared to traditional
methods. Unsurprisingly, perhaps, it is the more e-commerce
mature businesses, like the retail/wholesale companies, that are
particularly impressed with the internet as a selling tool.
There are, of course, still obstacles to be overcome
before the global digital revolution can really take off.
These are more formidable barriers – security fears,
particularly – than some e-commerce evangelists
would like outsiders to believe. But when a massive
81% of respondents believe that electronic trading
will revolutionize their dealings with customers –
and 31% say that the internet has already increased
total sales – it is clearly a revolution that is unstoppable.
E-commerce companies that are lagging now only have
a brief window before they fall irretrievably behind.”
The above quote could well have been written by a brand
holder to justify the significant investment in a new gTLD
(generic Top Level Domain) when the application window
opened for the expansion of the Internet back in 2012.
It was actually written by one of the 600+ dotBrand
applicants, KPMG Consulting (who became part of ATOS)
– but not in 2016, or even within the past couple years.
It was over 15 years ago. This was the conclusion to the
company’s Electronic Commerce research paper in 1999,
yet virtually every word could still be used by brand
holders today to justify an application for a new gTLD
when the second round eventually opens.
2
BACKGROUND
Before we explore the changing Internet landscape that
the new gTLD program created, let’s go back a few years,
to a time when the current revolution of the web was
still on the drawing board. The Internet Corporation for
Assigned Names and Numbers (ICANN) finally agreed to
an expansion of the Internet name space at their public
meeting in Singapore in June 2011. Nobody really knew
how many applications would be made when the window
opened. The UK-based tech industry website The Register
(www.theregister.co.uk) suggested that there would be
“as many as 500 applications, with a substantial portion
being dotBrands” (dotBrands being defined as trademark
holders who acquire their own domain name suffix).
ICANN predicted that between 100 and 200 brand
holders would make an application to join a very
exclusive club; one that offered the membership
benefit of owning their own slice of the Internet.
ICANN was very clever in the marketing of the program,
deliberately stressing the importance of this ‘once in a
digital lifetime’ opportunity to apply for a gTLD, rather
than suggesting that this would be the first of a
number of application rounds.
New gTLDS Round 2
Not surprisingly, the application process was complex
and comprehensive. This would not be a place for brand
holders who wanted to sit on the fence. The process
wasn’t without its problems, but even so, the number
of dotBrand applicants surprised many when the results
were finally announced in June 2012.
650
Almost 650 organizations invested time, resources and
hard cash in making an application. They came from
all corners of the globe and from every conceivable
business sector. Many were household names; a few were
complete unknowns – but the excitement generated
by the variety of applicants had a number of brand
holders looking on enviously. Although the conversation
in some boardrooms after the applications list was
published was “Why exactly did we apply?” There were
many more asking “Why didn’t we apply?” Seeing two
or three competitors gain an unassailable medium-term
advantage was enough to fuel some heated debates.
It was interesting to see that two of the big four UK
banks applied for their own gTLDs, and the absence of
an application from Facebook or Twitter, when more
traditional communications services such as Gmail and
Yandex had applied.
Many organizations dismissed the program as nothing
more than a marketing stunt, predicting that without
consumer education, adoption and usage, it would fail.
What the gTLDs needed in order to be successful was
some pioneers; companies that saw this opportunity in
the same way that the prospectors of the US 1889 Land
Rush did.
The road from the application announcement in London
in June 2012 to a fully functioning domain name in the
root zone of the Internet has been very long, very bumpy
and full of challenges for those involved. It took almost
18 months for the first gTLD to become live, and then a
further few weeks before the first dotBrand joined them.
Many dotBrands didn’t complete the journey. Hasbro
withdrew dotTransformers; L’Oréal withdrew its main
brand and a number of product-based applications; Heinz
withheld its applications (including dotKetchup) and,
surprisingly, Hilton International declined to register its
world-famous hotel brand. Whilst all had their reasons,
they had all gone through the hardest parts of the
process in making the decision to apply.
3
organizations
invested time,
resources and hard
cash in making
an application
SECONDS AWAY, ROUND ONE
The first of the new gTLDs to launch in late 2013 were
generic names such as dotBike, dotGuru and dotPics –
hardly TLDs that set the marketing department pulses
racing. The first dotBrand to launch was little known
outside of Australia. Monash University, based on the
outskirts of Melbourne, made Internet history when its
dotMonash TLD went live in January 2014. The fact that
the university had managed to progress its application
and ready itself for launch before some of the world’s
biggest brands summed up the ICANN spirit of the new
gTLD program – offering a level playing field not just to
those organizations that had the resources, but also to
those that had the desire to be part of a new Internet.
KPMG was the first big organization to brashly
announce that it would completely rebrand its online
presence under its new dotBrand gTLD. However, it was
actually the Chinese International Trust and Investment
Corporation, or CITIC for short, that got there first.
New gTLDS Round 2
It launched dotCitic in the summer of 2014, only to
revert back to using dotCom a few months later for
some unknown reason. Perhaps the concern was based
around losing natural search rankings by switching from
a traditional gTLD to a new one. This was, and still is, the
most important consideration for the adoption of any
new gTLD.
Unsurprisingly, Google (and consequently most other
search engines of note) have been relatively tight-lipped
on the subject of search and page ranking. We have seen
some new gTLDs succeed
in search result terms – AXA’s idea of creating a
website specifically for its financial information under
its dotAxa gTLD has shown that natural search rankings
can be achieved by following traditional search engine
optimization methods of relevant content, reflected in
the choice of domain name, whilst dotBarclays (home.
barclays) and dotBNPParibas (mabanque.bnpparibas)
have both successfully launched their dotBrands,
replacing existing dotCom websites with little impact
on natural rankings.
“This is the start of a new
phase of the internet"
Ben Fried,
CIO, Google
Other brands have now started to engage with the
program, ready to come out from the shadows after
watching the likes of Barclays, Cern (home.cern), Sandvik
(crushology.sandvik, as well as home.sandvik) and Fox (nic.
fox) represent the diverse nature of brands who all now
have one thing in common: owning and managing their
own slice of Internet real estate.
Google’s Chief Information Officer, Ben Fried, spoke
about the new gTLD program at the company’s annual
I/O conference in June 2014. “This is the start of a new
phase of the internet – we don’t know where that
journey will take us. However, finding things on the
web is the heart of our mission.” Although Google has
always said that its algorithm doesn’t favor one TLD over
another, and that the suffix is just one of many factors
used to rank websites, the company has changed its
definition slightly, in what could be the first nod to the
new program. “If and when there is enough information
to objectively understand that all sites on a .ABC (a new
gTLD) are relevant to .ABC then the TLD might carry
more weight for searches related to ABC”, the company
has stated.
Despite remaining non-committal, you cannot escape
the fact that Google sees a huge opportunity in the
program – otherwise why would it have applied for more
than a hundred gTLDs of its own? Back in September
2013, Google talked of the importance of its dotBrand
applications, including dotGoogle, dotYoutube and
dotGmail.
“The timeframe to get dotBrands out seems to be three
to five years, but we will not wait three to five years.
We will be aggressive. Speed is important”, said the
company’s gTLD spokesman, Hal Bailey. Yet, more than
two years later, there’s still little sign of any of Google’s
dotBrands becoming part of the fabric of the Internet,
although the recent launch of domains.google is certainly
an interesting move to become a challenger brand in the
highly competitive retail domain name space.
Those dotBrands that have launched using ‘home’ as their
key string to the left of the dot may have experienced
some initial drop in rankings, which is in some ways
understandable (the term is as generic as they come
and the Google algorithm will not necessarily see the
relevance of the term respected within website content),
but all who have made the transition have soon regained
that original ranking.
If one of the major opportunities of applying for a new
dotBrand was to gain a first-mover advantage, it seems
that few so far have wanted to make that bold move.
Any organization that didn’t apply during the first round
and is now considering an application should only do so
with clear usage scenarios in place.
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New gTLDS Round 2
In order to understand why an organization might
decide to make a second-round application, it’s worth
understanding the core reasons why the existing
applicants applied, and whether they would be valid
criteria for any future expansion.
“We will be aggressive.
Speed is important"
Unsurprisingly, some of the brand holders who are keen
to join the dotBrand club have been putting pressure
on ICANN to give an indication of when they will have
another opportunity to apply. It does appear that many
people have got ahead of themselves in heralding the
advent of a second round. As of the end of March 2016,
over two years into the first launch phase of the program,
there’s still a significant number of applicants waiting
to pass through ICANN’s production line and made it to
delegation. To start building momentum behind a second
wave before the first round has hit its teenage growth
spurt seems to be very premature.
Hal Bailey,
gTLD Spokesman, Google
A number of brand holders see the new gTLD program
as an opportunity to innovate – gaining a competitive
advantage in the biggest global market. Applicants can
use new generic gTLDs or their dotBrand to differentiate
themselves in geographical markets (London.ABC or
ABC.London, for instance), rather than having to use IP
location code within a website or specific country code
TLDs. Organization-specific TLDs will now have greater
meaning by combining relevant, specific generic terms
with the brand name, such as support.apple, service.bmw
or saxo.bank.
Two of the major concerns that brand holders have are
keeping their customers safe and their reputation intact.
Providing a safe environment for their customers, ensuring
that web traffic is not diverted and, ultimately, that they
maximize their online revenues are core objectives for any
successful online brand. The operation of a dotBrand gTLD
will ensure that organizations eliminate some of the most
common IP infringements we see today. It takes a matter
of seconds to register an infringing domain name and,
more often than not, damage to reputation, web traffic
and revenues can be inflicted before the brand is even
made aware of the rogue domain.
A slight misspelling of a brand name is often not
immediately visible to the human eye. If a brand can
confidently say “If it doesn’t end in dotABC, then it isn’t
us”, that is a massive advantage. Few competitors will
be able to make that claim, and that delivers consumer
confidence. This is one of the reasons why major global
financial institutions chose to invest in their own Internet
space. This, of course, requires investment in consumer
and customer education, but the long-term outlook is
very positive for dotBrands.
5
ARE WE READY FOR ROUND TWO?
Fairly well hidden in the document published in late
2014 by ICANN, entitled New gTLD Program Reviews and
Assessments, was a statement that suggested a second
round of new gTLDs is still a few years away. The exact
wording of the relevant paragraph was:
“ICANN anticipates contracting to be completed by the
end of 2016, and pre-delegation testing by early 2017,
before completing all the new delegations by mid-2017.
The gTLD Applicant Guidebook also provided that
ICANN’s goal is to launch subsequent gTLD application
rounds as quickly as possible, noting that the exact
timing would be based on experiences gained and
changes required after the completion of the first
round, and stating a goal for the next application
round to begin within one year of the close of the
application submission period for the current round.”
Over a year later and it seems that the timeline is holding
up, meaning that we don’t believe the next application
period for new gTLDs will happen before mid-2018.
It’s not that ICANN wouldn’t be ready. On the contrary, a
number of working groups have already been set up by
ICANN to examine what aspects would need changing
for a second round. The issues seem to be related
to the sins of our fathers: delays in creating a more
robust mechanism to handle issues such as contention,
prioritization and usage.
New gTLDS Round 2
There have even been mutterings that the second round
could actually be restricted to only geographic TLDs such
as dotNYC, dotBerlin and dotLondon, which have been
incredibly successful so far, and potentially additional
dotBrands. If that is the case, then that next window
could come sooner than we think, although the recent
explosion in registration growth of generic TLDs (dotTop,
dotWin, dotRed), especially through the Chinese registrar
market, would suggest that ignoring the generic terms in
a second round would not be in anyone’s interest.
We are familiar with the concept of no-win, no-fee
litigation, which revolutionized the legal industry and
has been responsible for the creation of thousands of
quasi-law firms, with no more expertise than what they’ve
learnt from an online course. That seems to have been
the approach taken by some dotBrand applicants, who
saw little financial penalty in applying during the initial
window, before withdrawing their applications when there
was a need to start devoting time, resource and money
to their application. ICANN’s rebate policy was perhaps
too lenient, allowing applicants to recoup virtually all of
their initial investment if they withdrew from the program
before the contracting stage. Some of these applicants
were poorly advised in the first place, some simply had no
appetite to take on such a commitment once they’d won
the right to their name, whilst others simply withdrew
their application(s) when it became apparent there would
be no competitive advantage.
6
New gTLDS Round 2
Rather than waiting
for the second-round
window to open,
prospective applicants
should now be thinking
about how they would
rewrite the digital
marketing playbook.
CONCLUSION
Innovation is the key to growth on the Internet today.
Owning a new gTLD will enable brand holders to
develop new engagement models with their clients.
For instance, offering every client their own bespoke
URL, whether for security purposes or simple vanity,
would allow a dotBrand to develop community-based
applications using the domain name as the key. The
history of the Internet has taught us that tomorrow’s
growth businesses, disrupters and viral applications
have very short incubation periods – Facebook has gone
from being an online platform used by a handful of US
students to a social media giant that is used by one in
five people on the planet. Rather than waiting for the
second-round window to open, prospective applicants
should now be thinking about how they would rewrite
the digital marketing playbook.
The key to any second-round applicants hitting the ground
running is to ensure that they have usage scenarios in
place long before the application window shuts. Taking
on the responsibility of running a new gTLD registry
shouldn’t be taken lightly, and all relevant stakeholders
must understand the time, costs and infrastructure that are
required to not only meet the stringent criteria laid down
by ICANN, but also to develop a new digital strategy.
Decisions on whether to apply for a new gTLD won’t
necessarily be made on the success of the first round, but
on standard business decision-making factors, including
return on investment, budget availability and brandprotection strategies. Any applicant needs to answer a
number of core questions before they put pen to paper:
●●
ow will we use the dotBrand in a way that will
H
benefit staff, stakeholders, shareholders and,
ultimately, customers? How will we measure success
once it has been launched?
●●
hy do we need to apply for a new dotBrand? Are
W
we applying to create a defensive position within our
market or will this give us a competitive advantage?
7
●●
hen should we start planning our usage scenarios?
W
Once we have our dotBrand, when will we be able to
start implementing new digital strategies?
●●
ho should be involved in the project? Should this be
W
driven by Marketing, IP, Legal or Technical? Who are
the key stakeholders managing the project?
●●
hat are our objectives for applying for the dotBrand,
W
and what are our objectives once it has been launched?
DISCUSSION POINTS
●●
In hindsight, can you see any value in your brand or
client’s brands applying for their own gTLD?
●●
ow would you define whether the program has been
H
a success so far?
●●
ow effective do you feel the Rights Protection
H
Mechanisms introduced for the program have been so far?
●●
o you or your clients view the program more as an
D
opportunity or a threat to the core brands you manage?
●●
ave you increased the marketing or IP protection
H
budgets as a result of the new gTLD program?
●●
hat’s your view on ICANN standing back to allow the
W
introduction of negative sentiment Top Level Domains?
●●
hat changes, if any, would you like to see introduced
W
before a second round is considered?
●●
hat would be the compelling event for you or your
W
clients to consider an application in the second round
when it eventually happens?
●●
o you feel that owning a dotBrand will give
D
organizations an advantage in the online battle for
customers, web traffic and revenues?
New gTLDS Round 2
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