Catching up with the early-adopter super-brands

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 which 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 revolutionise 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.

This quotation could quite easily have been written by a brand holder to justify investing in a ‘.brand’ new generic top-level domain (gTLD). While it was indeed authored by one of the 600-plus ‘.brand’ applicants, KPMG, it was written not in 2014, but 15 years ago in the last century as the conclusion to an e-commerce research paper. Despite its age, virtually every word here could serve as justification for a brand holder considering applying for a new gTLD when the second round eventually opens.

However, before we explore the changing internet landscape, let us go back a few years, to when the current web revolution was still on the drawing board. The Internet Corporation for Assigned Names and Numbers (ICANN) finally agreed to expand the internet name space at its public meeting in Singapore in June 2011. Nobody really knew how many applications would be made when the window opened. UK-based industry website theRegister.co.uk suggested that there would be “as many as 500 applications, with a substantial portion being dot-brands”. ICANN itself predicted that between 100 and 200 brand holders would apply to join a very exclusive club, which offered members the benefit of owning their own slice of the Internet.

ICANN finally agreed to expand the internet name space at its public meeting in Singapore in June 2011

Picture: ICANN

First round

ICANN was extremely clever in marketing the programme, 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. Unsurprisingly, the application process was complex and comprehensive. This would not be a place for brand holders that wanted to sit on the fence. The process was not without its issues; but even so, the number of ‘.brand’ applicants surprised many when the results were finally announced in June 2012.

Nearly 650 organisations invested time, resources and hard cash in making their applications. They came from all four corners of the globe and from every conceivable business sector. Many were household names; a few were complete unknowns. However, the excitement generated by the variety of applications had a number of brand holders looking on enviously. Hard questions were being directed to marketing teams across the world as to why they had not applied, while their competitors had.

Many organisations dismissed the programme as nothing more than a marketing stunt, predicting that without consumer education, adoption and usage would fail. What the gTLDs needed to succeed was some pioneers. Companies that saw this opportunity in the same way that the Land Run had delivered opportunities for the pioneers and prospectors in the United States back in 1889 would be the winners. Over two years later, we are still waiting for those brave brand holders to deliver something special to the internet world. As of November 2014, few have made the journey into new unchartered land.

The road from application announcement in London in June 2012 to a fully functioning domain name in the root zone of the Internet has proved long, winding and full of obstacles. It took nearly 18 months for the first gTLD of the whole programme to become live and then a further few weeks for the first ‘.brand’ to join it.

A number of ‘.brands’ decided not to make the journey to delegation. Hasbro withdrew ‘.transformers’; L’Oreal withdrew its main brand and a number of its product-based applications; Heinz withdrew its ‘.brand’ plus ‘.ketchup’; and, surprisingly, Hilton International withdrew its world-famous brand. While all had their reasons, they had all gone through the hardest parts of the process in making the mammoth application to ICANN. The road ahead certainly looked less bumpy.

The first ‘.brand’ to launch was not one that many had ever heard of, outside of Australia. Monash University, based on the outskirts of Melbourne, made internet history when its ‘.monash’ TLD went live in January 2014. The fact that it managed to progress its application and ready itself for launch before some of the world’s biggest brands perhaps summed up the ICANN spirit of the new gTLD programme, offering a new level playing field not just to those organisations which had the resources, but also those which had the desire to be part of a new Internet.

KPMG was the first big organisation to announce that it would completely rebrand its online presence under its new gTLD, although in reality it was actually the Chinese International Trust and Investment Corporation (CITIC) which got there first, launching ‘.citic’ in Summer 2014, only to revert back to its ‘.com’ domain name a few months later. Perhaps its concern was based on losing natural search rankings by switching from a traditional gTLD to a new gTLD. Unsurprisingly, Google (and consequently most other search engines of note) have been relatively tight lipped on the subject of search. While we have seen the success of some new gTLDs in search terms, AXA’s idea of creating a website specifically for its financial information under its ‘.brand’ has shown that natural search rankings can be achieved by following traditional search engine optimisation methods.

Google’s chief information officer, Ben Fried, spoke about the new gTLD programme at the search giant’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.” While Google has always said that its algorithm is not about favouring one TLD over another, and that the suffix is just one of the many factors that it considers in ranking websites, it has changed its definition slightly in a nod to the new programme: “If and when there is enough information to objectively understand that all sites on an .ABC (a new gTLD) are relevant to .ABC then the TLD might carry more weight for searches related to ABC.”

However, despite its refusal to comment on the subject, Google obviously sees a huge opportunity in the programme. The search giant applied for over 100 TLDs of its own and in September 2013 was talking up the importance of these, which included ‘.google’, ‘.youtube’ and ‘.gmail’.

“The timeframe to get .brands 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. Over a year later, there is still no sign of any of its ‘.brands’ becoming part of the fabric of the Internet.

Gearing up for round two

So if one of the major opportunities of applying for a new ‘.brand’ was to gain first-mover advantage, it seems that so far, no one wants to make that bold move. Any organisation that did not apply during the first round and is now considering an application as and when the second window opens should do so only with clear usage scenarios in place.

Some of the brand holders which are keen to join the ‘.brand’ club have been putting pressure on ICANN to indicate when this may happen. In September 2014 ICANN finally announced what it called the ‘pathway’ to a second round. The timescales will not have pleased the interested parties, suggesting that it may be late 2017 before ICANN is ready to start the process again.

ICANN’s reasons for the delay are based on the number of new gTLDs that still have not been resolved in the contention process. Few of these situations apply to ‘.brands’, although some organisations are still deciding to withdraw their application over two years down the line. There have even been mutterings that the second round could be restricted to geographic TLDs, which have been incredibly successful so far, and potentially ‘.brands’. If that is the case, then potentially that next window could come sooner than we think.

We are familiar with the concept of no win, no fee litigation, which revolutionised the legal industry and has been responsible for the creation of thousands of quasi-law firms, with no more expertise than what they have learned from an online course. This seems to have been the approach taken by some ‘.brand’ applicants, which saw little financial downside in applying during the initial window, then withdrawing their applications when there was a need to devote time, resources and money to the issue. ICANN’s rebate policy was perhaps too lenient towards these applicants, which meant that they could recoup virtually all of their initial investment by withdrawing from the programme right up until 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 had won the right to their name; while others simply withdrew their application(s) when it became apparent that there would be no competitive advantage.

While the question in some boardrooms after the announcement of the application list may have been, “Why did we apply, exactly?”, there were many more asking, “Why didn’t we apply?” Seeing two or three competitors gain an unassailable medium-term digital advantage was enough to fuel some heated debates. Two of the big four UK banks applied for their own gTLDs; yet there was no application from Facebook or Twitter, even though more traditional communications media such as Gmail and Yandex did apply.

In order to understand why an organisation might decide to make a second-round application, it is worth understanding the core reasons why the existing ‘.brands’ applied and whether these would be valid criteria for the future.

Why apply?

A number of the ‘.brand’ applicants see the new gTLD programme as an opportunity to innovate and gain a competitive advantage in the biggest global market. Applicants can use their ‘.brand’ to differentiate themselves in geographical markets (eg, ‘London.ABC’, ‘Germany.ABC’ and ‘Europe.ABC’), rather than having to use IP location codes within websites or specific country-code TLDs. Organisational-specific TLDs will now have more meaning by combining relevant specific generic terms with the brand name, such as ‘support.apple’, ‘service.bmw’ or ‘compliance.barclays’. Finally, the ability to use the new gTLD as a product search term instead of existing sub-domains or long URLs is a huge advantage – ‘lighting.philips’ is more memorable to both humans and search engine optimisation indexing servers than something like ‘Philips.com/lighting’.

One of the major concerns that brand holders have today is keeping their customers safe and their reputations intact. Providing a safe environment for customers, ensuring that web traffic is not diverted and ultimately that they maximise their online revenues are core objectives for any successful online brand. The operation of a ‘.brand’ gTLD will ensure that organisations eliminate some of the most common IP infringements that we see today. It takes only seconds to register an infringing domain name; and more often than not, any damage to reputation, web traffic and revenues can be inflicted before the brand is even aware. A slight misspelling of a brand name is often not immediately visible to the human eye. This is one of the reasons that major global financial institutions have chosen to invest in their own internet space – owning everything to the left of the dot will enable banks to say: “If it doesn’t say .ABC on a communication from us, then it isn’t us.” This, of course, requires some investment in consumer and customer education; but the long-term outlook is very positive for ‘.brands’.

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. Offering every client its own bespoke URL, for instance – whether for security purposes or simple vanity (eg, Calvin Klein was rumoured to be prepared to offer customers their own ‘.calvinklein’ domain name) – would allow a ‘.brand’ to start developing 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, for instance, has gone from an online platform used by a handful of US-based students to a social media phenomenon which today is used by one in every five people on the planet. Rather than waiting for the second-round window to open, prospective applicants should now be thinking of what they would do to 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. The responsibility of running a new gTLD registry should not be taken lightly and all relevant stakeholders need to understand the time, costs and infrastructure that are required not only to meet the stringent criteria laid down by ICANN, but also to contribute towards developing a new digital strategy.

Ultimately, decisions as to whether to apply for a new gTLD will be made not necessarily on the success of the first round, but on standard business decision making, including return on investment calculations, budget availability and brand protection strategies. However, any applicant needs to answer a number of core questions before it puts pen to paper:

• How will we use the ‘.brand’ in a way that will benefit our staff, our stakeholders, our shareholders and, ultimately, our customers?
• How will we be able to measure success once it has been launched?
• Why do we need to apply for a new ‘.brand’? Are we applying to create a defensive position within our market or will this give us a competitive advantage?
• When should we start planning our usage scenarios? Once we have our ‘.brand’, when will we be able to start implementing our new digital strategies?
• Who should be involved in the project? Should this be driven by marketing, intellectual property, legal or technical? Who are the key stakeholders to manage the project?
• What are our objectives for applying for the ‘.brand’ once it has been launched?

A ‘.brand’ gTLD is not just for Christmas; it is for life.