What’s In A (Domain) Name? Clearing Up TLD Confusion CMO, on February 14, 2012 by Alexa Raad

The campaign to halt the new top-level domain program generated great heat, but little light, leaving CMOs in the dark.

First, CMOs will need to unlearn the misconceptions that were propagated prior to the launch of the program, which began accepting applications last month. Some critics confused second-level domain names with generic top-level domains (gTLDs), thereby equating domain-name attributes and issues to new gTLDs—for example, cybersquatting.

gTLDs are, of course, to the right of the dot, while domain names are to the left. The distinction is important.

Under the new gTLD program, ICANN will not award a brand name as a TLD unless the applicant is the legitimate owner of the trademark. Thus, there can be no cybersquatting of a brand name as a TLD, eliminating any reason to defensively apply and then operate your own branded part of the Internet real estate as a registry unless you have a strategic reason for doing so.

Or do you simply need to protect your brand names as domain names? Previously, if someone other than the trademark owner bought a trademarked name as a domain name, the legitimate brand would need to know about it and begin an objection process to take down the domain name. Under the new TLD program, there is protection before the domain name is sold. Brands can register their trademarks in a clearinghouse. Registries would be required to check the database for protected names. Acura, for example, can register its brand names in the clearinghouse. If someone won the right to run a .car TLD, then no one but Acura could register the domain name acura.car.

A domain name is like renting an apartment. You can live there and have your own unique address, but you are not the owner. The apartment building owner dictates who can live there and under what rules (security, parking, inside alterations, outside access, etc.). It is much the same with TLDs. As owner of a TLD, you decide who gets a domain name and what rules they must follow.

Though TLDs will not be right for every company, CMOs must understand their potential for targeted marketing and revenue opportunities, encouraging customer loyalty, and increasing security. Consider these possibilities:

>> Imagine eBay offering its power sellers their desired name with an .eBay address—for example, [email protected] Such an address helps retain power sellers by clearly distinguishing them from other sellers, but it also boosts security. Meanwhile, with the required registration information, eBay would have verified email addresses that would signal to buyers that eBay has vetted its top sellers.

There are also new cross-promotional possibilities. What if a customer goes to an eBay power seller’s site but doesn’t find what she’s looking for? Today, she’ll leave the site and look elsewhere, likely outside of eBay. But with a TLD, eBay might offer sellers the chance to post ads or coupons for products on other seller sites. If used by the buyer, the referring site gets a small commission and the second site gets a sale from a customer it didn’t attract. Meanwhile, the customer stays longer on the eBay site, giving eBay a chance to offer other incentives, i.e., “Buyers of this item also liked…” As any online retailer will tell you, keeping a customer on its site increases the probability of a sale.

>> Disney operates at least 37 Web sites in 34 countries, meaning it has multiple registries to work with: .com, .uk, .co, .cn, .jp, etc. Each has its own rules, regulations, and security measures. Under a .disney, the company could reduce costs and more efficiently manage and integrate all of its online properties with a rational hierarchy of products. As a TLD, Disney would also have something it doesn’t as a Web site: real-time inter- and intra-TLD traffic information (not just Web site traffic). So it could know which character of a new movie is getting the most traffic and merchandise appropriate products to its various Web sites in real-time.

>> Nonprofits might also benefit from their own TLD. What if the Avon Foundation for Women provided every volunteer with a free domain name—for example, JaneDoe.AvonWalk? The domain name could be bundled with easy site creation, logos, links to social media, and fundraising tools, replacing mailings and manual tracking tools. The email address [email protected] enables Jane to avoid using her personal email while joining others to build awareness for the cause. And Jane’s recipients would be assured that any solicitation coming from an .AvonWalk address would be legitimate.

>> Host cities might have their own address—e.g., NYC.AvonWalk. Again, Avon offers templates so each city could provide consistent information and perhaps have directories of volunteers.

>> Corporate sponsors might have a branded site, such as Reebok.AvonWalk, where they would target their messages and offer promotional merchandise to volunteers.

>> Let’s imagine .pfizer. One of its challenges is to stem the sale of counterfeit Viagra, which damages Pfizer’s brand reputation and sales. Pfizer might offer a domain name under a .pfizer TLD to all of its legitimate Viagra resellers. Thus, anyone would have confidence buying from a .pfizer site that he or she is getting the real product.

Pfizer might be a case where a company distributes domain names to only authorized entities—distributors, resellers, suppliers, etc. Remember: Owning a TLD doesn’t mean you must sell domain names to anyone. You control the distribution channels and can impose any verification process you choose to ensure that the entity requesting a domain name is legit.

CMOs must begin by clearly defining their company’s online business strategy. Many will rightly conclude that a TLD is not necessary.

But with the end of the application period less than three months away, CMOs face a judgment call. Because ICANN has not committed to a specific time table for the next round of TLD introductions, CMOs who avoid that decision process may find themselves at a competitive disadvantage once the new TLDs rollout.

Read related article, “ Top-Level Domain Opportunity Awaits CMO Trailblazers.”