2014 was an exciting year in the domain name industry. We saw an explosion of new top level domains (new gTLDs) launches. It took 30 years to launch the first 315 top level domains. In 2014 alone 420 new extensions saw the light of day.
In August I had some of the most prolific domain industry experts give their view on the future for the new gTLDs. The expert roundup had plenty of great take-aways, so don’t miss it, if you want to have a look into the crystal ball.
As we now head into a very eventful 2015 with even more launches, the timing was ideal to ask ten leading experts the following question:
“What’s in the DNA of a successful gTLD?”
To help them on their way I asked these additional questions:
– Do successful new gTLDs share common traits ?
– Is there a way to spot the success of future launches in the registration stats?
– Why does .link get 50.000 registrations, when .direct only has 4.000 ?
– What is it about the success of .club or .guru that other registries might have missed?
The participants share a lot of their knowledge in this roundup. So if you want to understand better the new gTLD market you’re in for a treat. Personally I had several aha moments going through their analysis.
Here we go!
For some success is a pure “numbers game”. More domains registered on date X means that TLD A is more successful than TLD B.
However I think quite a few of us would disagree with that characterization.
In order for a TLD to be deemed a success it has to not only have numbers, but retain them.
And here I think there’s going to be some significant challenges for some of the registries.
A lot of the more “popular” TLDs are priced at the lower end of the spectrum. So .xyz and .link are going to generate more volume than say .global.
Some of the TLDs seem to have struck the balance between having a “meaningful” string, simple registration policies and pricing. I think this is why .club is doing so well. The term “club” has meaning in multiple languages so it resonates with a lot of people. The wholesale pricing they’re offering is simple ie. They haven’t got some complicated premium pricing system and the registry has done a good job of pushing the brand to the public.
However it’s still very early.
While there might be several hundred TLDs that are “live” now we’re still not seeing any of the big brands turning on theirs. The BBC only signed their contract with ICANN this week, but if they start to actively promote content under .bbc then I’d expect to see more widespread awareness of new TLDs.
There’s currently a lot of wild speculation around the SEO “value” of new TLDs. Until we see independent research that isn’t backed by a vested interest (registrar or registry) then it’s only speculation
The key will be the content not the actual domains.
Do successful gTLDs share common traits ?
Answering this question properly is a challenge. The open new gTLD market is a difficult market to visualize properly by an ‘outsider’. The major mistake, made by many, is to consider that the new gTLD market is almost a ‘free market economy’ and that all gTLDs are competing on a level playing field. This is simply not the case; most of the main commercial gTLD applicants (Famous Four Media being one of these) have their own corporate mission and so measure their own success in a number of different ways and not always by the most obvious, but most misleading, that of the number of domain names in the registry.
I believe that it is actually still too early to identify a successful gTLD. There are too many strategies in play at present to determine what is a success and what is a failure. For example, is number of domain names in the registry a good indicator for success? Or is number of domain names that resolve to a website a more meaningful figure? Maybe number of domains names that have renewed following first registration? Different applicants will be using different measures that are meaningful to them.
Becoming a new gTLD registry is not for the faint hearted nor for those short on funds. It is a costly, long-term commitment in a completely new, poorly understood market awash with competitors vying for the same customers who are, for the most part, not aware of nor interested in the magnitude of the change that has occurred to the Internet namespace.
Is there a way to spot the success of future launches in these stats?
Spotting a successful future launch is also a difficult task since the registries will be playing their launch strategy cards close to their chest.
I believe that the best and clearest indicator is the string itself, if it has a clearly definable addressable market (for example sports strings, geographical strings or professions) it is liable to quickly achieve a critical mass of domain name registrations.
In addition, if the registry has the money to commit funds to advertising both through the registrar channel and elsewhere it will make a noticeable difference to its initial registration volume.
However, registration momentum gained from advertising is expensive (in terms of cost per registration) and quickly lost and, in order to maintain renewal volumes into the second year, it must be maintained. Many registries do not have the funds to maintain this level of spend following launch.
Why does .link have 50k registrations and .direct only 4k?
This is a question that can be more easily answered when comparing one gTLD’s marketing strategy directly to another’s.
Registries’ go-to-market approaches vary from one to another. Some registries spend extensively on direct marketing and advertising in order to boost registrations. Other registries incentivise the registrar channel to promote their TLDs, and yet others speculate early by investing in their own domain names in the expectation of selling them later on the after market once the general public has had a chance to come-to-terms with the new gTLD industry and values for ‘premium’ strings have had a chance to establish themselves.
Some registries’ innovative go-to-market approaches have been notable flops (typically seen by single string niche TLDs) and others’ laissez-faire approach (typically seen from portfolio gTLD applicants) may seem to be neglectful. The traditional approach of spending like crazy on promotion has been adopted by some (most noticeably .club) and seems to garner results… but does that make it successful? Other approaches like ‘domain giveaways’ (as we saw with .Berlin) certainly boost registrations but are they registrations that will stay in the registry year-after-year?
One final approach, of which to be cognisant, is what I call the ‘opt-out’ registration, where a domain name matching your existing second level string is registered on your behalf by your registrar, free of charge, without your prior approval and if you don’t want it you have to ‘opt-out’. This sort of domain name is undoubtedly registered with auto-renew on which means that while you may have an additional domain name in your portfolio for free this year, you will be charged automatically for a domain name you didn’t request or want, when the domain gets renewed the following year. Does this constitute a successful registry or it is sailing close to the boundaries of sharp business practice?
What is it about the success of .club or .guru that other registries might have missed?
Can .Club truly be called a successful gTLD? Certainly it has reasonable registration volumes (at time of writing 156,000 names) compared with other gTLDs. These registrations were achieved through hard work and good marketing, but at what cost? With the larger registrars retailing .CLUB domain names at below $10, the total first year revenue (excluding premium domains) will be a maximum $1.5 million even if all registrars were selling at cost.
In order to obtain these hard won registrations, .CLUB has reportedly spent way over $5 million on marketing and will be spending an additional $3.5 million next year. There is no denying the quality and quantity of the marketing efforts expended by .CLUB to date, and as a marketer I applaud the professionalism of their campaigns. However, looking at these (admittedly speculative) figures, would a financial director consider .CLUB to be a successful business at the moment?
Compare that with .GURU (a Donuts registry currently on 79,000 names), which has had little in the way of marketing investment; donuts has so many registries that it is simply impossible to fund marketing spend in the way that single string applicant .CLUB has. Donuts undoubtedly benefited from GoDaddy marketing support on .CLUB, which has led to the giant registrar having nearly 60% of all .GURU’s names under management. Selling at around $40 retail the figures look a lot more encouraging with an estimated $20 wholesale, it too will be expecting around $1.5 million but crucially without the massive marketing spend that has been seen with .CLUB.
Jeff Sass, CMO at .CLUB Domains LLC. Follow Jeff on Twitter
2014 was a landmark year as it will always be the year that so many new domain name extensions were introduced and the opportunities for choice and change began. That said, we are still at the infancy of this dramatic change to the Internet namespace, and as with all infants, some progress at different paces than others, but you may not want to fully judge them until they grow up a bit. It is very early to draw too many conclusions or seek definitive patterns from what we’ve seen so far. It is probably too soon to define what’s in the DNA of a successful new gTLD – we’re still unwinding the strands and discovering new chromosomes. We thought “Short” was an important gene, but .PHOTOGRAPHY proved otherwise, and there will certainly be more surprises to come.
Consumer and business awareness of the new domains is still precariously low, and it will be interesting to see how the entire market is impacted once there are some truly mainstream awareness events involving a new domain extension. The big brand players haven’t really started playing yet, but they will, and at some point we’ll start seeing advertisements from big brands featuring new extensions, which will open a lot of eyes. As I like to say, the new domain extensions haven’t had our “Twerking Moment” yet, but it will come (hopefully without the involvement of Miley Cyrus).
If you do look for patterns so far, generally speaking I think there are clearly opportunities for geo’s like .LONDON, .BERLIN and .NYC and others that will be launching. I am a big believer in the value of domains that add meaning and thus serve a fairly defined audience. This has certainly helped us with .CLUB. After all, if you are a Club it just makes good sense to have a domain name that ends in .CLUB (and we’ve seen many broader uses of .CLUB as well.) .Photography resonates with photographers, .Realtor with Realtors, etc. Meaning matters.
As we go into 2015, the greatest challenges every Registry faces are the ones of awareness and clutter. On the one hand, awareness is low… on the other hand, once someone becomes aware, there are so many new names and new choices that the “clutter” can be a potential problem. We need to collectively help raise awareness for all new domains, and at the same time, market our own names aggressively so that they stand out to the right potential registrants.
With that in mind I think that in 2015 we’ll see stronger registry marketing efforts, especially as the highly contended names finally come to market, and we’ll see lots of innovation in channel marketing by Registrars, as well as creative new “verticalized” distribution channels for domains that speak to a specified market.
Just as the new domains present opportunities for innovation and creativity in the Internet namespace, all of us in the industry have to be innovative and creative in the ways we bring our domains to market and to the attention of consumers and businesses.
Joseph Peterson, Branding Consultant and Domain Investor. LinkedIn profile
What’s in the DNA of a successful new gTLD ?
Lion and gazelle agree: Success depends on perspective.
No TLD itself has any viewpoint. Really, a TLD doesn’t succeed except by proliferating, which is a kind of success shared with syphilis and ebola. What truly counts is someone’s goal. Importantly, while a TLD succeeds for one group, it may fail another. So we won’t just disagree about answers; we’ll be answering different questions. Success for whom? For us. For those we represent.
Among registries and registrars, the emphasis will be placed on large registration volumes, fat margins, and high renewal rates. Meanwhile, aftermarket sales platforms and domain brokers will care strictly about what’s selling at the moment, without obligation before or after it’s sold. Domainers are typically tied to their domains for a longer period and must weigh successful sales against market risk, purchase and holding costs.
Short-term domain flippers, brokers, and market places benefit from transient hype more than from TLD staying power; whereas long-term domain investors, registries, and (to some extent) registrars value longevity. Intermediaries who never own domains can afford to be TLD-agnostic, although short-term promotions at registrars and market places usually interfere with neutrality. Registries and domain portfolio owners invariably have some commercial or ideological bias as well, since we have invested in a stockpile.
That’s all as it should be. For the general public, which is by far the largest and the least involved constituency, a TLD matters only when it shows up. If they see it employed by quality brands, if they use it regularly while navigating the web, if it causes them no headaches through phishing or malware, misdirection or indirectly increased costs, then a TLD has succeeded.
And what of that most important group: end users? They’re the industry’s linchpin. How do they judge success? Those are my clients, in case that’s not clear. Perhaps the only thing they have in common is an interest in getting the job done. And that job is never the same. Roughly speaking, what they need are domains that communicate who they are, domains their intended audience responds well to, domains that make access easier. When a TLD enables that without compounding their overall cost and risk, then it succeeds.
Some success can be shared in, while certain transactions are inherently adversarial. Domains purchased for the sake of brand protection would most likely be tallied up as successes by anybody on the selling side. Registry, registrar, market place, domain reseller, and paid advisor could all congratulate one another on a job well done. But the buyer may perceive this expense as waste, resenting any TLD that increases his exposure to new cost and risk.
So I think it’s indispensable to take into account both what someone sees and where he stands. My own position is somewhat complex. As a branding consultant, I work mainly with end-user registrants. Like other domain investors, I have several development projects in the oven. One of these would place me in the role of a domain market place. Long story short, while success from the registry / registrar angle matters, I don’t share that viewpoint.
TLD success is commonly measured by registration volume. But I couldn’t care less … except insofar as it relates to TLD / pricing stability … or inasmuch as a large number of developed websites do or don’t help TLDs that I might invest in or which my clients plan to use. Primarily, I care about the success of individual domains – whether as investment assets or as branded projects.
From my perspective, success means any attractive domain, put to use, embraced by consumers, operated by a satisfied owner with minimal ongoing cost and no serious lingering brand protection issues. Success also means resale value and liquidity – i.e. a healthy aftermarket. The more either of those things happens, the more successful the TLD.
Having defined various versions of success by splitting hairs, let’s look at the TLDs. Finally! Not that there’s anything final about it. Each TLD is an article in its own right, and there are hundreds of the little critters. Furthermore, each TLD has years ahead in which to flop, boom, fail, regroup, put down roots, blossom, spread, or go out of fashion. Pricing will change. Competition will change. Policies will change. Registries will be bought out. Successful websites will pop up, set trends, lead the charge, become antiquated, and be displaced by newer sites. Success is always pending, always temporary.
Let’s pretend that ICANN had fired its pistol once only, and all TLDs started the race together – even though .GURU got out of the gate fast enough for an early win, while other nTLDs have yet to be awarded to an overseeing registry. Let’s pretend that all domains in all TLDs cost the same amount – even if Divorce.attorney is priced at $55,000 per year and .BERLIN was given away for free. Let’s pretend that every TLD enjoys the same level of registrar distribution – even though .CLUB, .UNO, and .LONDON have been prominently featured at the world’s largest registrar, GoDaddy, whereas Uniregistry TLDs spent 8 months entirely absent. Let’s pretend that each TLD is marketed and managed equally well – even if .CLUB is advised by top industry pros while .WED shot itself in the foot with naïve policies. Let’s pretend.
Obviously, a TLD’s success depends on all those external considerations, which have nothing to do with the TLD itself. Be that as it may, no luck with timing, no price discounts, no marketing budget however large, no management team however talented – none of it is enough to force the public to accept a bad TLD. In the extreme long term, as registry operators are shuffled, as market value and pricing equalize, as freebies are dropped, as a year’s head start recedes to insignificance, we can eventually … almost … perhaps examine a TLD on its own terms.
We’re left with a TLD’s inherent qualities, its natural promise. Abstracting TLD success from its corporate encumbrances, we can ask: What appeals to entrepreneurs, existing companies, nonprofits, and individuals looking to make something online? What will resonate with the public? What kind of market value can we expect?
No TLD needs to supplant .COM in order to succeed, and none will.
Yet there is a class of new extensions whose strategy is to offer a flexible .COM substitute. Versatility is their primary selling point, and they hope for the widest usage. Never mind that we already have .ORG, .NET, .BIZ, .CO, .INFO as fallback options! These TLDs aim to be skeleton keys that open any door. They come with minimal semantic baggage so as to be attachable to any string, regardless of topic. Generally, they’re 3 letters long, sometimes 4, which helps them “fit in” with established gTLDs and gain traction with consumers.
In terms of what makes them so flexible, well, approaches differ. Some are gibberish like .OOO and .XYZ. Others such as .ONL abbreviate longer words (“online” in this case). Several make use of short, preexisting terms with broad applicability. Among these are .LINK, .CLICK, .INC, and .WEB. It’s no wonder that .WEB is a consensus favorite. Like .NET, it signifies the internet as a whole, which helps create a sense of permanence, familiarity, relevance, and scale.
.APP doesn’t quite fit this mold, since it’s meant to add meaning. Still, .APP feels like a traditional gTLD purely because of its length – in contrast to .COMPANY or .ONLINE, which are long enough to appear somewhat alien to consumers. In general, I’d expect longer TLDs to underperform compared to short TLDs. But quality depends on other factors too, and a few long TLDs such as .PHOTOGRAPHY have already made inroads. Lengthiness is a detriment to domain value in general, as domain investors know. Where TLDs are concerned, there’s an added obstacle. Consumers haven’t memorized a list of the new domain suffixes, and they’re unprepared to recognize dots between long words as representing domains at all. Often they don’t.
Apart from character count, we ought to pay attention to syllabic length. To make another general prediction, I’m sure that multisyllabic TLDs will fare badly in comparison to monosyllables. That applies to groups of TLDs, all things being equal, which (it should be emphasized) things never are. Individual TLDs such as .PROPERTY and .MOTORCYCLES may outperform the likes of .REST, .BLUE, and .WED despite their extra syllables because terms like “property” and “motorcycles” mean or matter more to a better funded group of buyers / developers. Nevertheless, because brand names usually need to be enunciated by human beings, any TLD that adds 3 or 4 syllables to a name does limit the range of appealing domain options. That down side to .XYZ, .HIV, and .CEO could be missed at first glance. Yes, they’re as short as .BIZ in terms letters; but they’re actually longer than .FOUNDATION when spoken!
Setting aside registries that dumped freebies, .CLUB has more registrations currently than any nTLD; and part of this TLD’s success, I’m positive, is due to its brevity: 4 letters / 1 syllable. Another example: .ENTERPRISES and .VENTURES are utterly interchangeable, but few will prefer 4 cluttered syllables to the latter’s 2. That case is nearly a pure A/B test. Elsewhere, outcomes are confounded by other variables. But if we set short TLDs side by side with long TLDs, one group obviously wins the beauty contest. Compare .CLICK, .TIPS, .LINK, GUIDE, .LIFE, .TOOLS, .HOST, and .BEER to specimens along the lines of .CREDITCARD, .ENGINEERING, .COMPUTER, .COMPANY, .EDUCATION, the 5-syllabled .UNIVERSITY, or the incurably awful .CANCERRESEARCH!
In spite of my statement that long TLDs are at a disadvantage, I do believe that consumers prefer familiar words (however long they are) to unfamiliar abbreviations.
.MOBI failed for many reasons – least of which would be the fact that it’s an abbreviation for “mobile”. But if .MOBILE were to proceed without restrictions, it might overtake .MOBI a decade from now. Words are simply more natural. So I’d anticipate poor results for truncated nTLDs such as .REST, .PHYSIO, .ONL, and .ARCHI. Indeed, .RESTAURANT has already eclipsed .REST.
The reason for this is straightforward: Teaching consumers a new term is a large marketing challenge; words they know already. Registries would face an uphill battle, and so would businesses attempting to explain their domain to customers.
While some new TLDs wish to be tomorrow’s .COM (or .NET or .BIZ) by acting as a multipurpose tag, most new TLDs pursue other more targeted / limited ambitions. Some registries have looked into historical domain registration patterns and emulated final keywords that were detected in significant volume. With TLDs such as .ONLINE, .VENTURES, .SOLUTIONS, .DIRECT, and so forth, registries are taking advantage of business naming conventions that are already popular. Some might argue that they’re also taking advantage (in a parasitic sense) of websites that already exist, since whatever companies added these keywords to their .COM domains will now unexpectedly face the added cost of buying nTLD equivalents from squatters, registries, investors, or entrepreneurs – that or else risk losing traffic, emails, or trust to competitors.
Such clone TLDs probably will succeed to some degree by piggybacking on preexisting domains and by claiming a fraction of new registrations in the same style. Perhaps they’ll render these generic corporate suffixes even more commonplace, but in terms of innovation they have little to contribute. Even in .COM many of these add-on keywords suffer from being abstract rather than concrete, dull not vivid, interchangeable not unique, more like corporate jargon than colloquial speech. .ENTERPRISES and .ASSOCIATES come to mind. The best of the bunch contribute some definite idea, some hinted description of the service, or are short enough to resemble established TLDs. For instance: .ONLINE, .DIRECT, and .MEDIA.
A much more radical strategy is represented by keyword TLDs that define niche topics or industries. Narrow though these subjects can be, they comprise the bulk of new TLDs. So whether .FLORIST, .HOSTING, .RECIPES, .DANCE, .COFFEE, .PLUMBING, .REVIEWS, .YACHTS, .HORSE, or scads like them win or lose, the cumulative attempt to introduce category words as TLDs is (in terms of scale) utterly without precedent.
As ambitious as the project is, it’s arguably too small to cause a revolution. Most words simply aren’t TLDs. Even assuming widespread adoption of every new extension, the web would be so fragmented that consumers would rarely encounter a given niche TLD frequently enough to remember its existence. The average person may run across a .PLUMBING site once a decade, may misremember it as .PLUMBER, may incorrectly infer from it the existence of .CARPENTERS or .ROOFING, and finally revert to the tried-and-true – no, not .COM but Google. That’s a problem for businesses that depend on customer recognition, traffic, and word-of-mouth growth. Many registrants will end up forwarding their niche TLD domain to whatever non-niche TLD their customers expect to see – .COM, .ORG, .CO.UK, .CA, or perhaps (once hell freezes over) .XYZ.
Niche TLDs will succeed – but in a scattered, uneven, even haphazard way. The internet is full of limited-purpose websites for whom .COUPONS, .REVIEWS, .HOSTING, or .DOMAINS may be an adequate description of 100% of the services offered. And the world relies on single-service professionals whose website need never expand beyond the implications of .PLUMBING, .DENTIST, or .LAW. Larger brands with diverse offerings or startups (which ought to remain agile enough to pivot) would be unwise to confine themselves to one narrow TLD. But niche projects ought to pay attention to keyword TLDs that define what they do.
Keyword TLDs like these are largely dependent for their success on whatever industry they describe. We’re talking about a known quantity of real-world businesses. After all, there are only so many plumbers to sell .PLUMBING to. So the most relevant numbers are the rate of new website creation and the likelihood of domain rebranding among plumbers. Having a good relationship between registry and plumbers would accelerate change, but the fundamentals can only be nudged slightly.
Every industry entails a community. Within any community, things happen more the more they’re seen to happen. Once a TLD achieves some critical mass, then adoption will pick up. Maybe horse breeders will some day see .HORSE as trendy; maybe they’ll fear competition. For some nTLDs, for all sorts of reasons, this scenario will never take place.
Industries that hire internet-savvy professionals are more likely to absorb new TLDs quickly. Plumbers will be slower to develop .PLUMBING than hosting companies .HOSTING. The entertainment industry certainly has the infrastructure to place developed .MUSIC, .ART, and .APP domains in front of a worldwide audience. However, we should temper that optimism with the reflection that – after many years – .TV is still not in every household even though TVs are.
Small niches that consist mainly of little “mom and pop” businesses spend less on domains than industries full of large-cap corporations. The budget of a tattoo parlor is nothing to the budget of a cruise line; so a good .TATTOO will never have the market value of a good domain in .CRUISES. Let’s keep in mind, though, that a small business’s success is still success.
Another group of nTLDs pursues a somewhat different strategy. These keywords aren’t “blank” enough to act in the same way as traditional gTLDs; they add too much meaning. But neither do they define any commercial niche. They’re not the sort of drab corporate add-ons I discussed above with .ENTERPRISES. Instead, these TLDs qualify a brand name’s personality rather than describe its actual subject matter. Essentially, they offer some prepackaged novelty to a startup’s branding. Foremost among these so far stands .CLUB. We also have charismatic TLDs such as .NINJA, .GURU, .CLICK, and .SEXY. Judging what makes these TLDs successful is a question of taste (and of sociolinguistics). For instance, note these subtle differences in the way someone might brand the giving of advice through a TLD: as a .GURU, an .EXPERT, a .NINJA, a .CONSULTING firm, or someone humbly offering .TIPS. Each of these is right for somebody inappropriate for someone else.
In terms of market value, TLDs that are less serious in tone will be taken less seriously by entrepreneurs who want their projects to be taken seriously. Fun is fun but dispensable. Buyers will pay for .NINJAs and .GURUs only up to a point, while .CLUBs may be as elite as they please. A few .LUXURY companies may light cigars with $100 bills, but their pricing precludes mass adoption. .CLUB strikes the right balance between prestige and affordable casual, and both are reflected in its price scheme.
TLD duds are easy to spot. Some registries took their keyword analysis of the registration record too much to heart. High-volume keywords such as “best” or “top” proved so tempting that they decided to apply for .TOP and .BEST as if order word difference no made! Even though these TLDs are likely to flop, some domains built on them will thrive. For instance, BeThe.Best recovers a natural word order nicely. Other TLDs are unfathomably abysmal. What can be said of .FOO (lish)?
Some TLDs will become preferred vehicles for malware, spam, phishing, and so on. Any successful brands built on those TLDs will see their image tarnished. We can’t always predict this; but precedents such as .TK or even (at one time) .INFO suggest that very low barriers to entry can do lasting damage. As a brand, the TLD rapidly becomes allied with cheapness or scams. So I’d predict that TLDs given away practically for free will (as a class) tend more towards failure.
Registries are often their own worst enemies, aided and abetted by ICANN leniency. .TECH will be less successful thanks to .TECHNOLOGY – and vice versa. .ACCOUNTANT would get farther if it weren’t in a 3-legged race with .ACCOUNTANTS. Many other overlaps cause problems: .SHOP / .SHOPPING, .COUPON / .COUPONS , .PROPERTY / .PROPERTIES, .PICTURES / .PIC / .PHOTO / .PHOTOGRAPHY , .LAW / .LAWYER / .ATTORNEY / .LEGAL, etc. In all of these cases, ambiguity hinders branding, multiplying the cost, adding to the acquisition challenges, and discouraging end-user adoption. Dilution also reduces aftermarket value. No TLD can be judged in isolation, since they all compete with one another for finite resources. Any TLD caught up in such a tangled mess will have a harder time succeeding.
Where TLDs are concerned, English has become much more crowded than any other language. New TLDs in other languages are being introduced – but at nothing like the pace of English keywords. Compared to .COM, which crosses international borders with ease, or .NET / .ORG / .INFO, all of which are recognizable in multiple languages, most new TLDs will be confined to an English-speaking (often local) audience. Since language rigidity limits global adoption, any rare nTLD that can cross linguistic boundaries is that much more likely to succeed. With this in mind, I’d point out that both .WEB and .CLUB are meaningful in the world’s #2 language, Spanish.
IDN TLDs fascinate me, since they offer the biggest innovation of all – namely, the opportunity for people of every major language to navigate the internet without a foreign alphabet. China is the test case, the proving ground for IDN TLDs. The Chinese economy is robust enough, and their stake in the domain market has already begun to rival that of English speakers. With the Middle East in disarray, few Arabic IDN TLDs have much chance of success any time soon. Web development simply isn’t a priority for people in the region at this stage.
There’s no time to discuss city TLDs except to say that they’ll probably succeed in the same way and for the same reasons that ccTLDs have succeeded. As for corporate dot Brands, their success is in the company’s hands. Gripe TLDs, whose business model seems based on extortion, from my perspective cannot succeed by definition. .FAIL fails and .SUCKS sucks even if they’re registered and flipped for profit. Community-defined TLDs are another interesting case there’s no time for. Realistically, every single TLD deserves its own article.
We can’t neglect meaning … or the lack thereof. The most versatile TLDs are ciphers – both in the sense of adding nothing and (paradoxically) for encoding a subtle message. .COM isn’t meaningless, despite what’s often said. Nothing recognizable, associated with value, and tied to authoritative voices is meaningless. But neither is .COM a word. Nobody perceives it as a shorthand for “commerce” anymore. While .ORG has carved out a place for itself, .NET suffers from something of an identity crisis, having played second fiddle to .COM so long. One thing .NET has going for it – in common with .WEB – is multilayered meaning. Both “net” and “web” are permanent English words; both stand metaphorically for the internet. .NET also conjures “networking”, which .WEB doesn’t.
Many of the most successful new TLDs will succeed in very small ways. Perhaps just one ideally branded website will justify .BIO or .BUZZ and outshine all the web’s self-appointed .GURUs. Some success will be relatively massive – large enough to generate consistent aftermarket activity and introduce nTLD brands to ordinary consumers. These TLDs will be compact, globally understood, distinct from other TLDs, positive but not flippant, backed by big industries, and possibly describe a niche most of us participate in regularly. We know those can succeed. But that’s only if management doesn’t alienate their core constituency, flounder when it comes to marketing, and price their wares out of reach! I guess we’ll see …
I wrote about a similar subject two years ago just before the launch of many of the new gTLDs. I think much of what I wrote still holds true today.
Here’s what I think works:
Relationships. You must have them in the registry/registrar world and the domain investor (domainer) world. As digitally connected as we all are, nothing beats old-fashioned relationships.
Trust. Do what you say you are going to do. Registrars (and domain investors) don’t like surprises and they do talk to each other. Your reputation alone may determine whether you can even get in the door and or start closing premium name sales.
Plan ahead. Way ahead. Doing things on the fly doesn’t cut it. You’ve got to have a long-term strategy.
You better have a plan that makes sense, even if you have the relationship–with-the-registrar part down. Flush it out. Twist it around a little with a few test cases, but in the end it better be spot on. Otherwise you are probably toast. You need to communicate how you are different, how your domain will work. Define the problem and what you are doing to solve it, how the registrar and end-user registrant will benefit AND of course how much money the registrar can make!
You must inform registrars of key sunrise, landrush and general registration dates/deadlines/policies well in advance. Registrars must clearly understand your application, technical and OT&E procedures. They must understand payment procedures and all fees.
BD. BD. BD. Market. Market. Market. Sell, sell, sell. If you are not doing all three you are not going to capture revenue. You must first get to the registrar and then, even if they buy your story and your deal, you will have force feed many of them with your messaging/value proposition along with other critical integration information that won’t make them choke on their morning coffee and croissant vs. all the other stuff they have to do that day/week/month/quarter/year.
Successful new gTLDs such as .CLUB, .LONDON and even IDN TLDs like (Dot Chinese Online) have been successful in actual cash sales because of the above. They all seem to market like their hair is on fire and clearly communicate the value of their TLDs to the end users. They nurture relationships and pay attention to their partners. They all have several people in their organizations at the top level who have real hands-on down-in-the-trenches experience in the domain name industry and/or the markets they are addressing.
I don’t see the zone file numbers that appear in popular stats sites such as ntldStats.com as necessarily being an accurate expression of a particular TLD’s future success or failure. It’s one thing to be running a registry business in a financial sense, and another to be a domain investor. The two may not necessarily be in sync in terms of goals and/or an exit plan. That being said, I believe the old way of measuring success, which is that majority of a “new” TLD’s initial registrations will come in the first 30 to 90 days of launch will no longer hold.
I think the end-user B2B and consumer market for new gTLDs will gather steam with over the long term, and some TLDs that may seem low in their registration figures may surprise some with larger and unexpected gains in the future. Short-term I see more than a few new gTLDs limping along and/or possibly failing—and see 2015 and 2016 as years for mergers and consolidation.
While www.ntldstats.com is an interesting website, using it to measure new TLD success is tantamount to using Google Analytics for submitting your Form 10-K SEC filing.
A naïve focus on raw numbers over qualitative analysis will produce only superficial insights.
Instead, a focus on use, engagement, purpose and sustainable revenues are far better indicators of achievement. I’ve previously offered five tips for measuring the success of new TLDs.
Based on this, I’d suggest that .luxury is one of the best generic new TLDs around.
Their business model, policies and marketing engagement with their highly defined target audience have helped establish a very profitable business in a relatively short amount of time.
It’s important to not forget that the new TLD program is a lot bigger than just generic strings. It’s my firm belief that the most successful TLDs in the future will in fact be a .brand or .city.
A major focus for ARI Registry Services at the moment is our consulting program to help geographic and brand applicants establish their namespaces. We have been working with many .brand and .city clients on how they integrate their TLDs with their brand to generate ROI to their business.
While registrars and domainers care little about .brands, they will transform the way we use the Internet. And clearly, a mere count of the names registered under these TLDs will reveal little about the success of these namespaces.
Over 15 or so years, I’ve been a domainer, I’ve worked for a registry, and now I work for a registrar that focuses on brands. So I see things from several perspectives. New gTLD results so far aren’t all that surprising to me. In my view, the DNA of a successful registry (new gTLD operator) consists of the following.
1. let markets operate without too much interference.
2. foster trust amongst all stakeholders.
3. keep prices and rules simple and easy to understand.
4. follow established protocols.
5. are predictable and transparent.
6. promote aggressively while respecting their sales channels.
New registries could learn a lot by following the example of .COM, .NET, .ORG, .INFO, and some of the largest ccTLDs in the world, such as .DE, and even a few of the new gTLD operators like Donuts and .CLUB.
In the early days of the Internet, there was no such thing as premium domain names with ultra high renewal rates at the registry/registrar level. In my view the development of cumbersome and aggressive premium domain name policies at the registry level has harmed the industry more than helped it. Those who have been in the industry observed that this practice began with .MOBI and now is a standard practice.
Verisign, the .COM registry has grown to over 110 million registrations and remains one of the most formidable brand names in the world without ever asking for premium prices at the registry/registrar level. By letting markets work, they have developed the most ardent set of stakeholders and promoters in the world. This group of stakeholders includes domain investors as well as registrars and businesses who have a strong incentive to buy, trade, sell, and use .COM domain names. This stakeholder group generally trusts Verisign and has reasonable confidence that the rules will remain stable over the long term. This has created an ongoing and forceful incentive that benefits all involved (a benefit which has inured to Verisign over the years).
I recognize that new gTLDs are playing by new rules. None of them expects to register hundreds of millions of domain names. Their business models are different and premium pricing models are likely here to stay. They generally have to charge more. A few new registries like Donuts and .CLUB have priced domains reasonably and held back several thousand premiums rather than tens of thousands. They’ve also priced their premiums realistically. Holding back tens of thousands of premiums doesn’t make sense to me and I believe it hurts registry operators.
Do successful gTLDs share common traits ?
Yes, I think so. I’ve listed them above. I’d add that they also have well-thought-out business plans and are ready with all their pricing and policies before they go into Sunrise, Landrush, and GA. It’s sad that I have to state this but there are some registries who are in full launch that don’t have complete lists of premiums with pricing or are keeping their premium lists secret. I don’t understand that at all. It certainly doesn’t help them or us to sell more and it generally causes upset among end users.
In addition to the above, the string chosen matters quite a bit. Strings like .CLUB, .GURU, .LINK, and .TIPS all have wide appeal and were released with sensible rules and modest premium polices by trusted registries.
Why does .LINK get 50k registrations and .DIRECT only 4k?
.LINK got a good amount of extra promotion from a generally trusted registry (Uniregistry). I think that this promotion combined with a reasonably attractive, short and useful string, caused .LINK to shoot to a legitimate #11 spot on the new gTLD charts (even better if you don’t count new gTLDs involved in massive giveaways).
What is it about the success of .CLUB or .GURU that other registries might have missed?
(In addition to being catchy, popular strings, run by smart registries) .GURU benefited by some early press and circumstance related to the whole introduction of new gTLDs. It was one of the first out of the box along with .clothing (I’m leaving IDNs out of this discussion because I think they should be assessed on their own). .GURU compared with .CLOTHING makes a great case study because one has wide appeal and one is more industry-specific. They were released together, at the same price, by the same registry and .GURU is in the top ten while .CLOTHING is nearer to number forty. There are “gurus” in every industry and discipline. The Internet is highly conducive to advice, experts and “gurus”. It’s interesting to note that .EXPERT has also done quite well on its own (mid twenties on the charts even though it is priced much higher). This indicates that prices (not including premiums) don’t matter all that much. I think the difference shows that market opportunity does affect the standings.
.CLUB stands out in much the same way with two exceptional additions: First, they have been very aggressive, in many ways, similar to how the .CO registry made a name for themselves in years earlier. You see .CLUB at trade shows, they advertise, they promote everywhere. Second, they respect their channel. As a registrar, we have excellent support and cooperation with the .CLUB registry. There are co-op funds and real collaboration between registry and registrar. We don’t see them trying to disintermediate us from the sales process and that makes them a partner that we want to do more business with. The idea that a registry will be more successful if they go to market alone is a highly faulty conception.
There is one final point to consider in the success of a registry. A lot of domain names are being sold today by hosting companies. I’m also pretty sure that as an industry, hosting companies bring in a lot more revenue annually than the domain registration business does. Many top hosts give away domain names as part of their hosting packages. If a registry wants to reach this industry as part of their channel, they will need to price their new gTLD at around the same as a .COM, .NET, or .ORG. A lot of the largest hosts in the world offer only those three even today (See http://www.weebly.com/press/, one of the largest website builders in the world where over 20 million people have started websites). They generally don’t want to give away domain names that costs them over $10 or $20 wholesale.
Putting aside free domains, the new gTLDs that rose to the top (by volume), have one or more of the following traits:
A. Keywords. Almost any keyword makes sense with .club, .guru, and .xyz. The many reasonably good keyword combinations in these gTLDs are appealing to domain investors and industry insiders. I suspect they made up a significant percentage of the early new gTLD registrants, given most small businesses remain unaware of their availability.
B. Location. Geographic gTLDs like .NYC, .London and .Berlin also did well. The Internet is increasingly about “where” and not just “what”. This is being driven largely by the growth in mobile search, and the migration of local marketing away from traditional media to online channels. Users want to know what is nearby.
We should also not forget that each of these cities was a global brand in their own right long before new gTLDs were launched.
C. Passion. gTLDs that represent things a large number of people are passionate about, also did well. People are passionate about the places they live (e.g. NYC, Berlin, London), and hobbies (e.g. photography). That also explains why gTLDs like .club and .guru would do well. They can be applied to anything one might be passionate about, so these gTLDs have large addressable bases.
D. Marketing. Most of the new gTLDs at the very top of the list invested more heavily in awareness marketing. .Club, .NYC and .London clearly stand out from the pack, with well-executed marketing advertising and PR campaigns. The support and marketing assets of the NYC government and London & Partners gave each of them a strong platform on which to build their campaigns.
To pick future winners, look for new gTLDs with characteristics above and the following:
– Large addressable markets with high growth rates;
– Industry segments that are highly dependent on the Internet;
– Few alternative gTLDs choices; and,
– Experienced well-funded management teams
So why did .link get 50.000 registrations while .direct only has 4.000?
.Link is broad and generic and can be applied to any business model. Almost any keyword makes sense with .Link. Whereas, .direct implies a specific business model (direct from factory) and makes sense primarily for product related keywords.
Pricing is also a factor (at one registrar .link is priced at $6.99 and .direct at $34.99). The volumes may actually be a lot closer when you consider that each .direct generates ~ 5x more revenue per registration).
So what is it about the success of .club or .guru that other registries might have missed?
There are many good keyword combinations in .club and .guru, which makes them particularly appealing for domain investors, and they enjoy mass appeal, because they can be applied to anything one might be passionate about.
Being one of the very first new gTLDs to be launched gave .guru a first to market lift, and as noted above, .club made a major investment in a well executed marketing campaign
Morgan Linton, founded Linton Investments, a domain investment firm. Now CTO at FashionMetric. Follow Morgan on Twitter
I think the DNA of a successful new TLD is multi-faceted with the two core elements being the team behind the registry and the string itself. Team always comes first because with the wrong team any company or idea can fail, this is critical from marketing to long-term vision and strategic planning. At the same time, even a great team can’t force end-users to like a string that makes no sense to them.
The string itself plays a critical role because a successful TLD will have to convince end-users that they should brand around their string.
Founders that know how to reach their target customers and can show them the value of using a new TLD will win, but only if consumers get it. Broad-based marketing is only successful if it resonates with consumers. Google advertised Google+ like it was going out of style but consumers never took to it, there the issue wasn’t the team or the marketing, it was the product. For a new gTLD the product is the string itself so the magic really happens when a good string that resonates with consumers is run by a solid team that knows how to bring that TLD to market.
In the DNA of a successful new gTLD there must be relevance building.
First, we should notice that relevance is not about the number of domain registrations, it’s about being associated with a certain purpose for online presence. Current stats tell little about this, as some of them have issues with registry-owner registrations (like .link, where Frank Schilling did most of them – which I don’t have a problem with), freebies (like .xyz) and so forth. I surely list .club among the ones doing a good work in relevance building, and although this might have already been reflected in .club stats, it’s not about the stats, it’s about the work they have already done and keep doing. Their valuation for a funding round is more of an indicator of this than the number of .club domains, and balancing qualitative and quantitative measures of a registry is key to see the whole picture.