A Time for Domain Strategy & Discipline

Millions will be spent on new TLDs – where will you focus your resources?

With ICANN’s recent announcements that hundreds of new TLDs are slated for release over the next three years, companies must reassess their domain strategies. Without discipline and a clear set of principles to guide their preemptive domain registrations in coming years, some companies are likely to overlook TLDs they really need, while registering names in ones that are not critical to their brands and portfolio.

The large numbers of dotASIA registrations that began on February 20th of this year are good examples of how speculation and fear created by registry/registrar marketing tactics can lead to over-zealous addition of domain names to portfolios. One corporate registrar alone grossed $6M in .ASIA sales. Will brand owners be able to extract the value from their investment? Will .ASIA ever be adopted by consumers? While it was prudent to register a few key domain names in .ASIA, without an understanding of how to develop and maintain an effective domain name portfolio, companies will be tempted to over-register with the addition of each new TLD.

The goal of a well-constructed Domain Name Strategy is not to amass thousands of domain names that address every possible scenario, but rather to own the right set of names to meet the company’s business goals. Similarly, domain name registration should not be centrally focused on defensive registrations even though many vendors continue to create fear by emphasizing what “could” happen. Understanding which domain names will deliver positive value to your business and registering those names will keep them out of the hands of cybersquatters.

Owning the right names and using them appropriately will increase traffic inflow, improve consumer and partner experiences and will ultimately benefit the business through an increased ROI from Internet activities. Of course, the benefit to the business is dependent upon well-informed decision making and focusing on domains that consumers will most likely enter in the browser address bar.

FairWinds Partners’ methodology is a thoughtful process that focuses on delivering a strategy that is based upon the overall business objectives and goals of our clients. By combining technology with detailed interviews and research, our analyses and tiered strategies balance risk and reward, as well as costs and benefits. This methodology offers our clients a flexible formula with which to assess the importance of even a single name and determine if and where it fits in their portfolio of domain names. Because of how dramatically the landscape has changed over just the past 18 months, registrations that previously made sense may no longer be necessary. Similarly, new domain names are often needed to enable clients to take full advantage of the address bar.

One of FairWinds Domain Name Strategy clients, AIG, said the following about the importance of the service:

“In the online world, domain names are the way in which we promote and protect our brands in a manner that is consistent with our reputation and overall business goals…an appropriate Domain Name Strategy will protect brand names, help meet online business objectives, and save money by reducing online enforcement costs through preventative registration of the domains most likely to harm AIG and its customers if used improperly.”

In addition to broad appeal TLDs to be launched and administered by industry consortiums and “registry entrepreneurs,” the next trend may be the creation of “special interest TLDs,” or “designer TLDs,” that correspond to brand or company names. Examples may include .FORD, .AOL, and .SAP, although these are simply illustrations. While it appears ICANN and registry outsource companies are pushing such opportunities, companies should consider what is required to manage a TLD and what business goals can be achieved through such an opportunity before sponsoring a special interest TLD.

Specialized TLDs can offer brands unique control over their web content and new ways to improve consumer interaction. Owners of a TLD have the ability to allocate domain registrations made under that TLD, ensuring that the brand will only be affiliated with domains of their choosing. In addition, a simple wild card setting could direct all type-in traffic that did not correspond to a pre-existing domain name to the brand or company. This would eliminate the worry of consumers being misdirected due to typographical errors. An example of this practice is .CM (wild card setting).

There are, however, drawbacks to consider. The greatest risk posed by investing in a specialized TLD registration is that in order for it to be effective, consumers must type in domain names with the new extension. With the prevalence of direct navigation across TLDs and the dominance of .COM, achieving such a behavioral change may be difficult. This is particularly true if others attempt to create their own specialized TLDs. If consumers do not take to searching for brand sites through brand-specific TLDs, many billions of dollars in advertising investments could be wasted.

In the near future, FairWinds will release a guide on how to navigate the new trends in online branding including the specialized TLD. This guide is designed to help brand owners understand and react wisely to proposals for their own designer TLDs. In many cases, the promised benefits of specialized TLDs may be too good to be true. Our coming article will include an in-depth look at the pros and cons, required investments and possible risks when considering alternatives to Dot-COM.

Even if you are not considering a new TLD dedicated exclusively to your brand, understanding the elements of a solid domain name strategy will empower you to make confident decisions when a new TLD promises relevancy and a return on your investment. Likewise, the article will serve as a guide to address uncertainties and justify sunrise abstinence when you are unsure of the risks or returns associated with a new TLD.

FairWinds’ domain name strategy projects, which are tailored to the fundamentals of each business, exist to make sure the right set of domains is owned for the right reasons. In addition, our strategy projects help brand owners effectively and efficiently navigate industry trends. This is especially true with the pending release of hundreds of new TLDs. The resources of many brand owners are stretched thin and oftentimes so-called “advisors” have a vested interest in whether or not domains are sold, but FairWinds consistently provides objective advice that is solely focused on the best interest of our clients.