28 Oct
2014

Keeping one step ahead of the evolving Internet – a beginner’s guide

The decision of the Internet Corporation for Assigned Names and Numbers (ICANN) to liberalise the domain name space can be compared to the rush of privatisations of national industries in the latter part of the 20th century. Utilities, rail travel and manufacturing industries such as steel production have all benefited from the removal of government shackles and the enhanced competition offered by the free market. One of the most successful deregulations in the United Kingdom took place in the telecommunications sector, with the privitisation of British Telecommunications Plc in 1984 after it was divested from the General Post Office (now also floated as Royal Mail). Without this move, we would not have the technology we take for granted today, such as smartphones, home broadband or WiFi networks. The fierce competition in the mobile market is a prime example of consumer power influencing a fast-growing market.

Liberalising the Internet

For far too long, the world of domain names has been a closed shop. ICANN kept a tight rein on who could and could not apply for or run their own top-level domain (TLD) (eg, ‘.com’ or ‘.co.uk’), allowing a new suffix to be launched every couple of years such as ‘.eu’, ‘.mobi’ or ‘.tel’. However, the community at large essentially wanted to deregulate the domain name market and allow entities to apply to manage their own TLDs, assuming that they met the strict criteria laid down.

In 2011 ICANN finally announced that a window would open for applications. The digital gold rush was underway and more than 1,900 organisations applied for the right to own their own slice of the Internet. Some applied to run generic new TLDs such as ‘.dentist’, ‘.tax’ or ‘.ninja’, while others came forward to represent geographic entities such as ‘.london’, ‘.paris’ or ‘.africa’. More than 100 applied to run a new internationalised domain name (IDN), with nearly one-third of the applications coming from brand holders such as Barclays Bank, BMW and Philips, which applied to run their own private TLDs, known as ‘.brands’.

The vision of many started to become reality in late 2013 as these new TLD organisations started to launch their new domain names. Nine months down the line, the number of available TLDs has doubled to more than 600. Many companies are already adopting the new domain names, whether they are using them descriptively for their business (eg, ‘NetNames.domains’ or ‘Spanish.academy’) or stepping into a brave new world with their own ‘.brands’ (eg, ‘.axa’ and ‘.monash’).

While many will view this resetting of the Internet as a golden opportunity, others will focus on the inherent risks in the change. With many of the prime domain names in the ‘.com’, ‘.net’ or ‘.co.uk’ name spaces taken a long time ago, the new TLDs give organisations a chance to reinvent themselves. The question they should be asking is: “If I could choose the ideal domain name for my business, what would it be?” The importance of an online presence has never been as crucial as it is today. For many brands, their prime channel to market and point of interaction with their customers is now a small handheld device such as an iPhone or tablet, where a simple search is the key to success. Memorable domain names that are relevant to searches are vital for engaging with the younger generations who are shaping current technology. Want to go for pizza in London? Why look through pages of search results when you could simply go directly to pizza.London or London.pizza? Booking a flight to the sun? How about cheap.flights or lastminute.holidays?

Managing online presence

The new generic TLDs (gTLDs) will make it even more important for companies to manage their online presence carefully. This new phase of the Internet will affect various parts of an organisation, such as legal (for brand protection and IP purposes), marketing (for branding and awareness) and the traditional home of the domain name portfolio, information technology.

Over the next few years all businesses will have to reassess how they are optimising their online presence in all of these areas, while protecting their hard-earned reputation, revenue and intellectual property. History shows that disruptions to everyday life happen with extraordinary speed – after all, it is less than a decade since many of the world’s most popular online brands were created. So what may seem like a futuristic vision today could actually be here sooner than we imagine.

While the changes to the Internet will deliver once-in-a-lifetime opportunities for ambitious brands, uncertainty surrounding rights protection mechanisms, dispute resolution and cybersquatting have already prompted many rights holders to adopt a defensive approach to the gTLD programme, with some organisations spending hundreds of thousands of dollars to ensure that their IP rights are protected. With the benefit of hindsight, it appears that the measures taken by some have proven to be a less than cost-effective approach to protecting rights.

Navigating the changes to the Internet requires the input of stakeholders in any organisation, and it is essential that all departments understand the significance of the new gTLD programme. The blanket registration of all trademarked terms under each new gTLD is simply not a cost-effective or manageable option. However, while some additional investment is necessary, it can be optimised with a balanced Trademark Clearinghouse registration, domain registration and trademark monitoring strategy. By having a strategy framework in place and selecting providers competent in these areas, a company can implement its strategy effectively.

Each organisation should ask itself the following questions:

  • What impact will the new gTLDs have on the existing business model?
  • What are the opportunities and threats for the existing business objectives?
  • What are competitors doing?
  • What trends are emerging in the new gTLDs?
  • What audiences should a company be targeting, now and in the future?

Once these questions have been answered, rights holders must understand:

  • which trademarks should be protected under rights protection mechanisms such as the Trademark Clearinghouse and Domain Protected Marks Lists;
  • which new gTLDs should be registered actively versus defensively;
  • which trademarks and domain strings should be used and monitored in order to identify infringements; and
  • what strategy should be adopted to deal with infringements should they occur.

Experience of developing sophisticated trademark policing strategies for organisations shows that the existing methods used by rights holders do not translate well to the new gTLD programme. At present, approximately 300 TLDs are available for registration globally, but more than 600 generic, geographic and internationalised domain name TLDs are expected to be introduced over the next few years. The new TLDs are far more descriptive than the existing set of 22.

Determining the opportunities and threats that each TLD represents to a business, in collaboration with internal stakeholders for brands and their marketing, will give a company a clearer idea of which domains to register and in which phase of a TLD launch the registration should be submitted. By employing this approach, a brand owner can ascertain quickly which trademarks to submit to the Trademark Clearinghouse – the centralised database of marks to which all new TLDs must connect – an essential requirement for participation in a TLD sunrise launch. The Trademark Clearinghouse offers an early warning system for brand holders, but in reality this provides little protection against domain infringements.

New opportunities

The new programme will offer brand holders some major opportunities. The opportunity to combine existing brands and new TLDs should be a marketing department’s dream. There are five main reasons for registering brand-related new TLDs:

  • Innovation – a different TLD appears unusual and exciting and provides a talking point for consumers, such as ‘netnames.rocks’ and ‘netnames.ninja’ – perfect for new marketing campaigns, or even for slogans or straplines.
  • Focus – certain TLDs specify a sector focus, with potential for priority treatment in natural search, such as ‘netnames.domains’ and ‘netnames.website’. These domains help to explain what a customer does.
  • Trust – consumers build trust in certain TLDs which demonstrate security or help to verify identity, such as ‘netnames.secure’ or ‘netnames.trust’. For any organisation which relies on online sales, such a domain suffix could give it a vital edge in the fight against cyber threats.
  • Organisation – specific TLDs enable separate sites or sub-sites for visitors looking for a particular topic, such as ‘netnames.contact’ and ‘netnames.reviews’. These could be used as landing sites for specific marketing campaigns.
  • Localisation – certain new TLDs appeal to specific cultural groups, defined by location or language, such as ‘netnames.london’ and ‘netnames.كوم’ (the Arabic version of ‘.com’). Geographic domain names offer even the smallest brand the ability to differentiate its global markets.

Brand holders must ensure that they are prepared for this opportunity by creating a strategy for the new TLD programme. The principles of the strategy must balance cost against opportunity and risk. Obviously, not every new TLD is relevant to every business, so it is essential to take an early view on which gTLDs are relevant in order to mitigate costly sunrise registrations that simply will not be used.

One of the opportunities that the new TLD programme delivers is the chance to secure sector-specific registrations which could be incredibly valuable in terms of driving search traffic to websites. Quality sector registrations can be highly valuable both in terms of marketing and in search rankings. In the past decade, a number of sector-specific domain names have sold for millions of dollars, such as ‘hotels.com’, ‘toys.com’ and ‘insure.com’. The new TLD programme will open up a number of new sector-specific domain names that could cost a fraction of the values we have seen on the secondary market. Examples include ‘fashion.shop’, ‘film.reviews’, ‘music.download’ and ‘car.insurance’. For brand holders with imagination, these sector specific domain names offer a once-in-a-lifetime opportunity.

Disadvantages

But it is not all good news for brand holders. The new TLD programme has been widely criticised for increasing the threat of domain names falling into the hands of cybersquatters who are interested only in holding the brand to ransom. Certain TLDs that brands will be forced to register can be divided into three key areas:

  • Brand damage – some new TLDs present an immediate risk of brand damage from registration by disgruntled consumers. These negative sentiment domain names (eg, ‘.sucks’, ‘.gripe’ or ‘.exposed’) could seriously damage a brand, especially when combined with social media. In addition, while the principles of free speech should always be protected on the Internet, ‘.review’ and ‘.reviews’ may be a must registration where they could be used for positive purposes. In addition to these names, there will be a number of adult-themed TLDs, including ‘.adult’, ‘.sex’ and ‘.porn’, that many brands will not want to be associated with.
  • Fraud – while the Internet has led to all sorts of possibilities, it also poses a growing number of threats in terms of criminals trying to obtain personal details of users for further illegal actions. Some of the new TLDs could be used to trick internet users into thinking that they are visiting authenticated and validated websites (eg,’.institute’, ‘.solutions’ and even ‘.group’). The European Banking Authority has stated that “the potential for consumers of financial services to over-rely on what might be perceived as ‘regulatory endorsement’ of the companies operating under such TLDs is immense, and the risk for new types of fraud and ‘phishing’ can be enormous”. The US Federal Trade Commission has stated that “the proliferation of existing scams, such as phishing, is likely to become a serious challenge given the infinite opportunities that scam artists will now have at their fingertips”. It takes only a few seconds to register an offending domain name, a few hours to build a fake website and just one or two hoodwinked customers to do the damage.
  • Counterfeiting – many brand holders spend thousands of dollars each year to protect their brand from counterfeiters. Companies such as NetNames work with brand holders to scan the Internet looking for websites that appear to be selling counterfeit items which cause reputational damage and divert genuine website traffic, and ultimately revenue, into the hands of cybercriminals. The new TLD programme throws up certain new suffixes that, when used in conjunction with a brand, could cause consumers to be fooled into thinking that they are buying genuine articles (eg, ‘.shop’, ‘.deal’ or ‘.discount’).

Next steps

Clearly, there are plenty of options for rights holders to review and assess when developing a cost-effective strategy in the new TLD programme for their business. Some may opt for a balanced mix of active and defensive registration, combined with monitoring, while others may choose to invest more in one approach. One thing is clear: businesses must be well prepared for this imminent change. Key to this will be stakeholder engagement and a well-developed domain name strategy. Executed correctly, the domain name strategy should shift from costly defensive domain registrations to owning digital assets that can demonstrate measurable return on investment.

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NetNames

37th Floor, 25 Canada Square

London

E14 5LQ

United Kingdom

Tel +44 870 458 9401

Web www.netnames.com

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Stuart Fuller

Director of commercial operations

[email protected]

Stuart Fuller is director of commercial operations at NetNames and specialises in the issues affecting brands online. He focuses on the rise of online threats and domain name management, particularly within the retail, financial services and IT sectors. Mr Fuller is a recognised expert in the new generic top-level domains programme, and is frequently published in a wide variety of internet, marketing and trademark protection publications.