Verizon: Domain Program Excellence

After less than 3 months, Verizon established a plan that:

• Will Save $1.1 Million by Re-Evaluating its Domain Investments
• May Earn Up to $2 Million by Selling Non-Core Unbranded Domains
• Will Usher in Over 3 Million New Visitors to its Web Sites

The Internet, with its 1.4 billion users, is arguably the fastest growing medium for exchanging information and conducting commerce. Verizon is a forward-thinking company dedicated to providing the best possible products and services to its customers, and has been making changes to its domain name strategy in order to harness the power of the Internet and meet its customers in expected and relevant ways. Working with the experts at FairWinds Partners, Verizon has not only been able to better provide its customers with safer online experiences that deliver desired content, but is able to do so in a more cost-effective manner.

In today’s economy, it is necessary for a company to do everything it can to optimize its market potential while being especially prudent about the allocation of its resources. Many companies have reevaluated their brand strategies and budget proposals and have been left feeling that the only way to cut costs is to make sacrifices. Verizon, however, has taken a creative approach to developing a brand strategy that has cut over $1.1 million in unnecessary spending while increasing incoming revenue and the overall strength of its brand.

Verizon has been working with FairWinds since July 2008 to develop and implement an updated domain name portfolio strategy tailored to Verizon’s specific brand goals and to the needs of its customers. Domain names are the gateways to Web sites, and understanding which names garner online traffic is the key to optimizing a company’s online presence and increasing revenue for the brand. Likewise, understanding which domains attract limited or unrelated traffic and which domains are not necessary for brand protection allows a company to avoid the cost of buying and maintaining those domains. While many domains may seem to intuitively fall into these categories, evaluating the true value of a domain requires a systematic, in-depth analysis and a keen understanding of the Internet landscape. Making the wrong adjustments can lead to larger problems later, but this risk can be mitigated with third-party validation.

Verizon’s domain strategy identifies where Internet users are looking for the company and prioritizes domain names accordingly; this has also been important for preventing third parties from registering these domains and infringing upon Verizon brands. “We’re using the same intelligence employed by the domainers and cybersquatters to our advantage in order to protect our customers from infringing sites,” said Sarah Deutsch, Vice President & Associate General Counsel of Verizon Communications.

Understanding how Internet users search for content and subsequently prioritizing domains allowed Verizon to take the first actionable step in its domain strategy - cutting the wasteful registrations that have accumulated by identifying unproductive domains in its portfolio which offer little or no value to the company. Unproductive domains include those with outdated or low-quality roots (the part of the domain to the left of the dot) in any extension and sensible roots that may have been registered in superfluous extensions. These domains bring in little traffic and are often irrelevant to the company’s brands or overall domain strategy. In Verizon’s case, Ms. Deutsch, Patrick Flaherty, Trademarks and Copyrights Counsel for Verizon Corporate Services Corp., and FairWinds Managing Partner Josh Bourne worked together to identify more than 4,000 of these domains.

Many of these domains have been cut and others are under review. It is estimated that it would have cost Verizon $725,000 over the next two years to maintain these unproductive domain names. Instead, as these names are removed from the portfolio, Verizon can apply those savings to other areas of its business.

“In the past, domains that generated little traffic, including some that were hugely expensive to maintain over time, were added to the portfolio,” said Ms. Deutsch. “Moving forward, we are making a concerted effort to be vigilant in our efforts to create a targeted and effective portfolio.”

Verizon worked with FairWinds to identify unbranded domains that, while not critical to Verizon’s online strategy, may be desirable to other companies. Through these efforts, Verizon now has certain domains that can be brokered to third parties. At an average expected value of $20,000 per domain, these sales could result in $2 million of new cash that can provide budget relief or be used by Verizon to finance additional domain investments.

For the domain names that remain in Verizon’s portfolio, FairWinds and Verizon will continuously monitor the productivity of all assets to make sure every domain in the company’s portfolio is evaluated and kept or dropped based on its return on investment (ROI). Knowing the amount of traffic going to non-core domains that are not related to Verizon’s brand protection strategy, for example, will allow the company to justify shedding more domains over time. If a given domain is unlikely to generate significant harm in the hands of cybersquatters, Verizon can confidently trim it from the portfolio.

The companies will also work to ensure that each domain resolves to relevant content, so that Verizon customers have meaningful experiences and positive impressions when interacting with the company’s brands online. Verizon expects to gain more than 3 million new annual Web site visitors by leveraging its optimized domain name footprint on the Internet. “We want to make sure that our customers get to where they want to be on the first try,” said Brian Price, Executive Director of Verizon’s Online Center of Excellence. This provides a better experience for customers and benefits the company as well. “The top ten domains that we redirected have garnered a quarter of a million visitors and over 1,000 sales in the last six weeks alone.”

Finally, Verizon has taken advantage of reduced domain name registration fees and operational efficiencies, and will save an additional $350,000 in registration fees over the next two years. By paring down its domain portfolio to contain only those domains that provide a satisfactory ROI and regularly monitoring these domains, Verizon continues to establish an online presence that furthers its goals of brand promotion and education as well as effective and secure customer service.

“There is truly a very small universe of people that have a detailed understanding of the domain name space. We’ve been lucky to work with a talented internal and external team of experts to help us to create an efficient and effective online brand strategy,” said Ms. Deutsch.