Brand TLDs: The Skeptic’s Corner


ADOTAS – Skepticism is good. It’s healthy. It’s wise. And in the world of marketing, where trends spike and plummet on a daily basis, it’s absolutely vital.

That’s why it’s good to take a hard look at the new program from the Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit organization that is responsible for technical coordination of the Internet domain name space. Beginning in January 2012 and ending in April 2012, organizations of all kinds can apply for a top-level domain (TLD) — the right side of the dot — and then determine what goes on the left. In other words, companies are able to have www.myproduct.mybrand.

But just because organizations can do it, does it mean they should? Let’s be skeptical for a second.

First, the price is a serious investment that requires due diligence and multi-function consideration. The application cost is $185,000, and there will surely be ancillary costs – IT, marketing, legal, staffing, etc. — related to the change. In this economic climate, is an outlay of this kind worth the risk? Every bottom-line-conscious executive is right to ask tough questions about financial resources, ROI and market response.

The .com suffix is unquestionably commonplace, especially in the U.S., but many companies have managed to build their brands online regardless. Opening up the vocabulary of the Internet may seem like a good move, but the relative shortage of gTLDs – there are a total of only 22, in addition to country code domains – certainly hasn’t stopped it from transforming every aspect of communication, information and transaction over just a few years. Why change it now? Why change it at all?

On the other hand… there are multiple areas in which a brand TLD can offer significant benefits to the companies that make the change and do it right.

First, think about your last marketing campaign. Given the staggering range of channels now available to reach target audiences, most campaigns have become extremely complex, and the words and phrases used are vital.

Organizations typically devote nearly half their digital marketing budget to online campaigns that are distinct from the main website. When customers can’t find the relevant site that money disappears. According to the “Outsell Annual Marketing and Advertising Study 2010,” if even a fifth of the budget is devoted to an online destination that can’t draw the right traffic or add to the bottom line, it adds up an annual aggregate loss of $11 billion to American brands alone.

Here the .com is a huge obstacle. No matter how catchy the domain name is, it still ends the same way, and the tortured syntax and wordplay contortions found in many campaigns bear this out. By contrast, controlling the right side of the dot for the umbrella brand, and highlighting the campaign theme on the left, is a major step forward.

This advantage plays out in the search function even more directly. According to the McKinsey report, “Impact of Internet Technologies: Search,” in 2010 alone, paid searches and search engine optimization (SEO) totaled $15 billion in the U.S. and $30 billion worldwide, and it’s sure to be even higher this year. Organizations now spend between 35%–50% of their overall online ad spend on search.  If this function improved annual retail-level revenue by just 1%, that’s a savings of $670 million.

But it’s not just about doing things better; it’s about doing new things. For example, what if the right customers were allowed to take on their favorite brand as part of their online identity? An individual could have myname.yourbrand, and even get an e-mail like me@myname.yourbrand. Through this process, the company could create a unique level of affinity with its strongest customers, while advertising itself each time the individual sent out an e-mail — an entirely new marketing channel for discounts, events, etc.

Again, it’s good to be skeptical — the current gTLDs are seared into the business lexicon, and moving away from them requires a seismic mind shift (especially in the U.S.), allocation of precious resources and perhaps a leap of faith. Still, it’s also good to remember that most online marketing techniques that are routine today didn’t exist before the channels themselves — such as those in social media — entered the mainstream.

The reality is that creative marketers will find ways to capitalize on the freedoms brought about by the rise of the truly branded TLD while some will determine to not move ahead on this opportunity. However, companies who commit to move now will have an advantage to lead how brands play out in the marketplace and define the new online world.

This article was cowritten by Steven Cook, former Samsung Electronics SVP, CMO, North America; former P&G and Coca-Cola global brand marketer; and CMO Council Advisory Board Member.



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