Measuring Success for gTLDs

Alexa Raad
 (May 24, 2015)

As recently mentioned by Ray King in this this guest post on TheDomains.com, Domains Under Management are no longer relevant as a measure of success since volume can be built relatively quickly with low-priced or free domains, and it is neither a measure of usage, quality, nor profitability of the TLD. I brought this up in June 2014 on my blog http://architelos.com/does-gtld-registration-volume-measure-success/ and wanted to expand on this subject.
“….More importantly, it’s not volume that is important, it is your back-to-basics business fundamentals.” For example, are you:

1. Generating a respectable and sustainable gross margin? After all, what good is it if you are generating volume at loss?
2. Building a repeatable base of business? Yes, giving away domains helps bolster volume but what percentage of those registrations will renew? How many will have good content, meaning not a parked page or a redirect? How many will have actively used email addresses? Think of email addresses that are consistently used by registrants of the new gTLD as a free viral awareness campaign. The more that email address with the new gTLD to the right of the dot is out there, the more free awareness the new gTLD gets.
3. Enabling a healthy ROI? After all, for many new registry operators a new gTLD is a brand new venture that represents a significant investment of both upfront and on-going resources. What is the opportunity cost versus deploying that time, capital, and energy into other industries and/or other business opportunities?
4. Attracting and maintaining the target registrants? Free domain registrations tend to result in not only a spike in registration volumes but also a jumble of registrations representing a mishmash of segments. Many of these registrants won’t even recall registering the domain a year from now, and when it’s time to renew they will see no reason to pay for something they have had for free and never used. Some registrants will be domainers whose sole interest in the new gTLD is monetization and not use. And sadly, many registrations are likely to be by bad actors who see virgin territory and a low barrier to entry for abuses such as spam.”

Recent announcements from Barclays and Marriott International, Inc. have highlighted their shift to .barclays, .barclaycard and .marriott, and there is a July 29th deadline looming for the remaining brand TLDs to sign registry agreements with ICANN. Most .brand TLDs are going to have very small registration volumes by nature but could pack a powerful punch in terms of branding and overall awareness for the new gTLD program. Could .brand TLDs lead to a new measure of success for new gTLDs overall?