For marketers, the domain name system (DNS) can be a little tricky to navigate.
If you’ve ever been tasked with buying a domain name, you’ve probably heard of terms like hyper text transfer protocol, subdomains, top-level domains, and more. Now, whether or not you remember the function of each part is an entirely different story …
So before we dive into anything technical, let’s start with a quick deconstruction.
This address is made up of three main parts: before, between, and after the dot. Before the dot, you’ll find the subdomain (www). Between the two dots, you’ll find the domain name (DreamBuildSuccess) But what we’re going to dive into below concerns the text that comes after the dot: the top-level domain (TLD).
Back in the 1980s, the internet was introduced to a handful of generic TLDs: .com, .org, .net, .edu, .gov, .int, and .mil. Since then, the Internet Corporation for Assigned Names and Numbers (ICANN) has expanded the domain name system, and introduced a new wave of TLDs known as Brand TLDs.
What’s a Brand TLD? Who has one? And how are they using them? Keep reading.
What Are Brand TLDs?
A Brand TLD is like any other TLD (think: .com, .org, or .net), but instead of a generic term, it is the brand’s trademark (think: .bmw, .apple, or .google).
A Brand TLD is proprietary, meaning only the brand can register second level domains such as drive.bmw, mac.apple, or search.google.
In terms of security and innovation opportunities, there are many considerations. It starts with understanding that the DNS is the very foundation of the internet. Without the DNS there is no Internet. Everything runs on the DNS. Owning a proprietary space at the root of the DNS offers opportunities for innovation, security, trust, and control that are entirely new. Never before have brands been able to own a proprietary slice of the Internet at the root level.
In terms of SEO, “early use cases indicate no negative search impact, and even potential benefits,” according to Neustar. “New TLD holders should (as now) focus on building highly relevant content on their .brand and .generic to earn search visibility,” they went on to explain.
However, it’s important that marketers that are considering a switch continue to monitor the impact that these new TLDs have on the brands currently employing them, as it’s too soon to determine the long-term effects.
ICANN is the governing body that sets rules for the internet. In 2008, ICANN approved a program to radically expand the domain name space with the introduction of new TLDs. In 2011, ICANN began accepting new TLD applications from entities across the globe. Any entity could apply to own and operate a new TLD, however, the application fee was a steep $185K.
In 2012, ICANN announced they received 1,930 new TLD applications of which approximately 1,400 were unique, separated into five categories: Generic, Geographic, Community, Internationalized Domain Names (IDNs), and Brand. Just over 600 brands applied in Round 1. (You can check out the complete list of brands here.)
What does the program status look like today?
By February 2014, new TLDs began to rollout. As of May 1, 2016, there were 17.2 million new domain names registered across 978 delegated new TLDs. In comparison, this represents approximately 13.5% of the entire .com population (around 125 million), which took 30 years to reach.
As of December 2015, there were a total of 314 million domains registered. As 2016 progresses, we expect to see the remaining 300 to 350 new TLDs delegated to the internet. In fact, ICANN just recently announced the program’s 1,000th delegation, stating that there are nearly 50 times as many generic TLDs now as there were in 2013. It’s expected that the pace of change will accelerate as public awareness and usage grows.
ICANN has committed to future rounds to allow brands and other entities to apply for additional new TLDs. Industry insiders expect Round 2 to be heavily participated by Geographic and Brand TLD applications.
Why Many Big Brands Are Making the Move
According to Neustar’s FAQs of New TLDs list, “new Brand TLDs offer a unique and significant opportunity to drive brand affinity, build trust, enhance security, and engage customers.” And that’s largely why we are starting to witness leading brands deploying initial use cases.
Business leaders are engaging and beginning to understand the new Brand TLD capabilities that can improve business performance. To help illustrate these benefits, let’s take a look at a couple of key selling points:
1) Cost Benefit
Naysayers about these new TLDs complain that applying for and operating a Brand TLD will add significant cost burden to the business, and offers little benefit. And they’re partially right: the initial investment is up there. However, it’s important to consider what it means for the future of brand digital identity management.
For this reason, you should quickly unpack the relative value of a Brand TLD compared to current domain market conditions and status quo domain portfolio practices.
What are domain names worth?
Due to scarcity and the power of language, one word domains can be valued in the millions of dollars. On Wikipedia’s list of most expensive domains, you will find market values ranging from $35 million for insurance.com to $3 million for loans.com.
One-word domains — also referred to in the industry as “category killers” — are extremely valuable. Why? Because they are short, memorable, and mean something to audiences.
Now compare that to the cost to acquire and operate a Brand TLD priced at a few hundred thousand dollars and offering an unlimited number of one-word branded properties that are authentic and trusted. The comparative cost vs. benefit to acquire and operate a Brand TLD is nominal.
What does it cost to protect a brand?
It’s not uncommon for a brand to hold multiple domains for defensive purposes. However, doing so results in significant costs — including registrar outside counsel and internal administrative costs. Layer on legal fees to monitor, file, and administer rights protection such as UDRP (Uniform Domain-Name Dispute-Resolution Policy) to recover infringing domain names, and the cost of brand protection is massive.
Then, consider the efficacy of defensive domain activity spend today — and in the future with thousands of TLDs to guard your brand against. It becomes unsustainable from a cost and efficacy point of view.
Brands who own a Brand TLD will educate audiences to trust websites using their Brand TLD. As this education permeates the market, the active use of a Brand TLDs will begin to reduce the expenditure required to protect your brand.