Where's The Meat In ANA's Claims Against ICANN's gTLD Program?

My colleague Chris Stutzman reports from the 2011 ANA Masters of Marketing conference that Association of National Advertisers (ANA) CEO Bob Liodice used his keynote presentation to continue to hammer ICANN's generic top-level domain (gTLD) initiative. Maybe he should listen to Dana Anderson, SVP at Kraft Foods, who spoke about how "lasting change happens in leaps and bounds, not through incremental shifts."

I've been advising companies since ICANN's announcement in June on how to evaluate the .brand or .category opportunity, and most of those companies haven't found a bona fide new business opportunity that justifies the investment in a gTLD. But with few exceptions, they're looking at ICANN's plans as one of the biggest opportunities since the dawn of the Internet to take more control of their brand online, which is why the ANA argument troubles me.

The heart of the ANA’s arguments come down to claims that it will cost brands billions of dollars in defensive registrations to protect their trademarks from cybersquatters and other web perpetrators of all sorts. But let's dig into that a little deeper:

  • Will it be billions of dollars? I have yet to see ANA produce any data to support its claims that the costs will be staggering.
  • Will there be squatters on your .brand gTLD? If you are a brand owner with any IP rights to your brand, there’s no way a perpetrator will win an application for your .brand TLD. Even if one could, no squatter will spend $185,000 on it.
  • Will there be squatters on secondary domains within new gTLDs? There are not just two dozen TLDs today; there are also a few-hundred country code TLDs (ccTLDs). If brand owners don’t see the need to spend money today on defensive registrations on all 22 gTLDs and on every one of the hundreds of ccTLDs, then why will they see the need to do a defensive registration on someone else’s new gTLD?
  • Organizations that are applying for gTLDs must explain in excruciating detail what they plan to do with the gTLD (i.e., what business initiatives they will create), and they have to establish and enforce policies for who gets into and who gets taken out of their registries.
  • Not all gTLD operators plan to sell secondary domains to the public, but those that do will be municipals (.london) and categories for communities, industries, hobbies, etc. (.golf). To what extent will Coca-Cola be harmed if someone buys and squats on coke.golf or coke.london, when consumers come to learn that the only authentic Coke web properties end in .coke? If Coke decides to sponsor the PGA tour, it would more likely build a site at pga.coke.

gTLDs aren't for every organization, but if we're going to make claims about billions of dollars in expenses for brand owners, let's show the math.

Comments

cybersquatting does occur in ccTLDs

As a person representing a domain registrar, I should profit from wider selection of TLDs in the future. But I have to agree with ANA's objections.

Cybersquatting on ccTLDs does occur today and the fact that trade mark owners do not spend money on protective registrations of all of them does not prove they are not harmed by the squatting. In most cases I have experienced, the trade mark owner claim their rights only after they enter the relevant market for the particular ccTLD or after they find out somene parasitizes on their trade mark. If that happens on cocacola.london they will be forced to claim the domain regardless of what is the well known official domain even if it is their own new .brand TLD.

I personally believe the reason why trademark owners do not register all the ccTLD domains is that it is simply too difficult and expensive for them. Already today it is not easy at all to keep track of what TLDs do exist, what are the rules to register a domain, what names are taken and by whom. If you wish to keep this issue well under control your only chance is to hire a specialised "brand detectives" and domain specialists to protect you rights. Obviously this is not cheap so you may get an idea where the "billions of dollars" may go to. Few global brands do so but still do not register their brand names everyvhwere untill it is necessary. The reasons for this expensive way of protecting brand names is the extreme complexity of the domain "world" and the lack of very specialised knowledge of this field. And the rise of new gTLDs (from 22 to thousands?) will definitely not improve that state.

I see that the suporters of new gTLDs often use the .brand as their argument because the TLD owner will control the rules and perhaps will not allow others to held a name in this TLD. Lets get over the fact this is a very expensive way to protects your rigts, but the other (open) generic TLDs will surely provide a lot of room for so called "domain investors" and cybsrsquatters. If arounf 50% of .com is taken by them today, they will be a very important target group of all the future new gTLD registries. Apart from .brand TLDs (and non-commercial), all the other TLDs will be open with the ultimate goal to make money. That is the reason why subersquatting will occur also there and why the brand owners will have to spent more money, time and energy on their protection.

Math

The number ANA seems to most frequently use is $2 million per gTLD over 10 years, or $200,000 per year.

That seems like a pretty reasonable estimate. At least, it's not massively excessive given data from the small number of registry services providers that have publicized their prices to date.

You'd only need 500 such gTLDs -- which is well within the predictions of most domain name industry experts, maybe even on the conservative side in some cases -- to get to a $1 billion total over 10 years.

Kevin Murphy
DomainIncite

ANA & gTLDs- Strangely Disingenuous or Just Plain Wrong?

I've been amazed and dismayed by trade groups like ANA and the DMA making their sky-is-falling noises about the coming new generic TLDs.

Whether you are a brand who sees mostly opportunity or one that sees qualified risk, you owe it to your brand to learn as much as possible about the implications for this essential, and imminent, re-structuring of the interwebs of names.

In my network we're working with our brand partners to assess the situation in light of all factors --- the competitive landscape, the consumer experience, search / content & engagement strategies as well as the brand's product and marketing initiatives in the future - near and far.

Formulating a smart and informed brand gTLD strategy is the brief. Understanding the opportunities and risks is the required first step towards developing that strategy. Implementation of these strategies will likely range from the nimble and opportunistic to the guardedly defensive. But the point is, your actions will be strategic not reflexive.

Hopefully CMOs and CEOs will be heeding the advice of analysts like Jeff Ernst here over those muffled but strangely shrill voices coming from heads in the sand like ANA and DMA. A little more here, from yours truly, setting this innovation within the context of the manifold forces of change all brand owners and managers are confronted with today...

http://bigevidence.blogspot.com/2011/10/changing-nature-of-change.html

Thom Kennon | @tkennon | + Thom Kennon | bigevidence.blogspot.com

Finally some well reasoned voices

Well done Jeff.
Its great to see some well reasoned voices coming to the fore on this subject. What we see happening is a deregulation of the name space, and the new gTLD program is but part of it - albeit 6 years in the making. Applying for a new gTLD is not advisable for many brands, but all owe it to themselves to go through a rational decision process, weighing the risks versus the opportunities, against their larger corporate strategies to arrive at a defensible decision. For some, this will be a game changer, not only in terms of the security and control a new TLD as a platform provides, but also in terms of new branding and marketing opportunities. To dismiss this without adequate (and often non-existent or blatantly wrong) information is strange. Bravo to you and other agencies who encourage an unbiased dialogue based on facts and not hysteria or conjecture.