Why Are Brands Abandoning gTLD Applications? by @JenWolfe of @Wolfedomain

Original Source Posted by Jennifer Wolfe on Wed, Jun 05, 2013 @ 02:36 PM

A number of brands have recently fallen from the list of visionary companies applying for gTLDs. Hasbro’s Transformers, Hilton, GM’s suite of gTLDs and Heinz have all decided to pull their gTLD applications, opting out of participating in the first paradigm shift of the Internet.

Why? There two likely reasons — companies are having difficulty responding to ICANN’s clarifying questions that were designed more for an open registry than for brands, or they are balking at the costs associated with applying for and migrating to a gTLD environment.

In the grand scheme of business, both of these reasons are shortsighted, as companies with gTLDs will have significant brand differentiation and innovation opportunities as compared to those who have not applied.

The clarifying questions that may be troubling to brands involves explaining their gTLD strategies and financial models, as brands may not have determined their exact strategies or financial models at this point. However, a response does not need to include a full-blown list of plans.

For most brands, their gTLD strategy simply involves a migration of their .com business model into a top-level domain environment. While this could certainly evolve as new ways of using gTLDs are revealed, the basic model is pretty straightforward. In addition, costs are projected to be the same as operating a .com, plus the specific registry functions of a gTLD, and revenue should not be expected to change at the get-go.

The other primary reason that brands may be dropping off is that they question the value of continuing the application process and see the cost of operating the gTLD as much higher than with .com. While there is certainly a higher cost involved, I would challenge brands to consider whether the cost savings from dropping out is worth more than the value of moving forward. The answer for any large company is “no.”

To break this down:

1.  The cost to apply for a gTLD is $185K.

2.  The cost to migrate .com over and run the gTLD is approximately $250K per year (before you consider investing in innovative ideas). This cost represents significantly more opportunity and responsibility than .com, as brands own and can therefore leverage all the Big Data opportunities.If gTLDs don’t change everything, then this costs about as much as a bad ad campaign or a spot during the SuperBowl that doesn’t work. For big car companies, hotels or even the mighty Transformers, this amounts to a rounding error.

3.  If gTLDs do change the way everyone uses the Internet, then this is a cheap investment for owning critical Internet real estate and being one step ahead of competitors. And if gTLDs do transform the digital world and you abandon, then you are likely to go through this process again in the next round — not to mention wasting the investment thus far.

4.  I have talked with many C-suite executives at Fortune 500 companies, and most of them don’t want to be the leader who didn’t make a relatively small investment in the next big thing just because they couldn’t figure out how to answer some challenging questions.

This gold rush of the Internet is a calculated risk worth taking — acquiring the real estate you want is critical, and the price is well worth it. If everything changes and you have drop out while competitors stayed in, you could lose market position.

So don’t quit while you are ahead. Think creatively, get better advice, and consider that the cost of dropping out is far greater than staying the course of opportunity.

Public Interest Registry’s (NGO) InterAction

This week, Public Interest Registry exhibited at InterAction’s annual forum held in Washington, DC to promote .ORG and two new domain extensions that we intend to launch by mid-2014 — .NGO and .ONG (the .NGO equivalent for Spanish, Italian, French and other Romance languages). To say the very least, we were extremely pleased with the turnout of the conference.

InterAction is a wonderful organization (in its 29th year) that encourages individuals from public, private, and NGO sectors to engage, learn, and build together; to address shared challenges related to human rights, philanthropy, relief, education, and health; to develop solutions that will improve quality of life for people of the globe; and to work toward making Earth more sustainable.

There were a few things that really stuck out to us at this particular conference:

  • Practically everyone who attended and/or exhibited at InterAction were already affiliated with organizations that use a .ORG website to promote themselves online. Those who have a .ORG address told us that they purposely chose this domain extension to let people know that they are part of a trusted, nonprofit community, and it’s a place to tell their stories and promote their cause(s). They like being a part of the .ORG family 🙂
  • Many of these same individuals did in fact identify themselves as part of non-governmental organizations (NGOs). So, when they saw our .NGO/.ONG banner, the concept of NGO as a domain extension instantly clicked and they wanted it…badly! One comment that we received was, “Why hasn’t someone come up with this sooner?!”
  • We were reminded that NGOs need a lot support at a grassroots level. We highly value our engagement with this group to better understand what they need from their local perspective. .
  • One tool that stood out for us at this conference was the NGO Aid Map, which allows you to explore and learn about NGO projects taking place all around the world, to find new NGO partners, and to download and analyze open data associated with international aid and InterAction’s members. We think that this well serve as a great reference tool for the community.

Not surprisingly, there was one common question that many of the attendees had: Do we have to switch from .ORG to .NGO? The answer to this is NO! In fact, we encourage (validated) NGOs to have both domain names active for a couple of reasons:

  • Maintain brand equity. Since your organization has already invested in building a brand under .ORG, there is no reason to eliminate this extremely valuable equity. Your supporters already recognize you as a .ORG, and we believe that there is great value to maintain and continue this trusted recognition.
  • Increase brand equity. Because .NGO/.ONG is a validated domain; it would be advantageous to use this extension to show the world that your organization is a validated NGO.
  • In addition, by having a .NGO/.ONG domain address, you can enter yourself into Public Interest Registry’s online directory of NGOs. You will be part of an online portal — think of this as a community hub for NGOs — that not only allows NGOs to find one another (by name, region, cause) and communicate about important issues, but it will also allow you to be more easily found by donors and volunteers. We truly hope to see that the fruition of our labor with this online space turns into elevated awareness of NGOs and their important work throughout the world.

We are still several months away from launching .NGO and .ONG; however, now is the time for NGOs to really start paying attention to what is happening on the Internet. The future is a digital world and we believe .NGO/.ONG will play a big part in this community.

If you or someone you know is affiliated with an NGO, please encourage them to visit http://www.ngotld.org for more information about .NGO/.ONG and, equally important, submit an Expression of Interest (EOI) for their own domain(s).

A big thank you to InterAction for allowing Public Interest Registry to exhibit at their event, and also to the volunteers that helped make the conference such a great experience. We cannot wait to launch our new domains in 2014.

Sincerely,

The Public Interest Registry Team