The Ups and Downs of Owning a .BRAND gTLD, Part 2: More Benefits

In this post, we’ll finish discussing some of the benefits of applying for and owning a branded gTLD. Tomorrow and Friday’s posts will cover risks.

BENEFITS OF OWNING A BRANDED GTLD, CONTINUED

Opportunities to build brand loyalty.
Because brand owners will be able to have full control over which second-level domains are part of their gTLD, they will also be able to choose how all those domains are used. That means if they want to distribute those domain names to customers to use as personalized homepages (like the J.Crew example we mentioned earlier on this blog), for email addresses, or for any other purposes, they can. Depending on how they chose to utilize them, giving out personalized .BRAND domain names could provide brand owners with new and interesting ways to build up brand loyalty among customers. And fortunately, the application process affords applicants some flexibility to adapt their plans to use their gTLDs in the future as new and innovative usage models emerge.

The potential for increased security.
As we discussed in the “International Security” post, new gTLDs can offer brand owners the opportunity to move away from unstable country-code top level domains (ccTLDs), where the functionality of the registry can be impacted based on the activities of a volatile political regime. Because brand owners will oversee the operation of their .BRAND gTLDs, they will have a degree of control over the security of the domains in those gTLDs and be able to reduce their dependency on third-party registries.

If done correctly, applying for a new gTLD could be relatively cost-effective.
Despite all our careful, guided speculation, there is still no way of knowing exactly what kinds of benefits new gTLDs will provide three, five, or ten years into the future. So in a sense, pursuing a branded gTLD is somewhat of a gamble. But the wager does not have to be astronomical. In certain scenarios, a brand owner will be able to acquire an uncontested new gTLD during the January to April 2012 application round for as little as $250,000 including the ICANN fee and basic technology costs, without compromising on the quality of the application. If it decides to run the gTLD as a closed registry and use it minimally, yearly operating costs could be as low as $50,000 to $75,000. If brand owners select the appropriate partners, they can keep their costs down to around $750,000 for the first decade of ownership.

Of course, the benefits discussed here and in yesterday’s post are only a snapshot of the potential benefits associated with applying for a branded gTLD. Every brand’s business model will come with its own unique opportunities and challenges. That is why it is important for all brand owners to become as informed as possible about the new gTLD program and the impact that it could have on their business.

Click here to read Part 3, which discusses some of the risks associated with .BRAND gTLDs.