One of America’s leading representative groups for advertisers, the Association of National Advertisers, has railed against the introduction of new gTLDs since it woke up, belatedly, to the fact that they were coming.

Now they have published a blog posting on their website of the potential impacts new gTLDs may have on trademark holders and advertising, written by their general counsel’s office at Reed Smith LLP.

The “report” by Report by Brad R. Newberg says that the introduction of new gTLDs “has caused a great deal of (pragmatic and reasonable) consternation among brand owners who were worried that the new gTLD program would lead to rampant cybersquatting. Future posts will have more about that, but this post asks the question: Putting aside cybersquatters, domainers (those who speculate in domain names for profit), and in-house counsel at brandowners, when it comes to the public at large, if a TLD launches in a forest and no one is there to hear it, will it make a sound?”

Newberg notes “ICANN’s purported reason for launching the new TLD program was to open up domain names in non-Latin characters (through new TLDs in Arabic, Chinese, etc.), foster competition, increase consumer choice, and offer alternatives to individuals and businesses who might have been shut out of their preferred .com name. However, the actual launch of these TLDs has seen practically no advertising, resulting in a collective yawn from the general public—most of whom are blissfully unaware that any new TLDs exist.  In fact, given the registration numbers, it is hard to imagine that most of the already-launched TLDs will still be around in two years.  None has failed so far, but it is possible that the first TLD to close its doors will start a domino effect.”

One would have to question whether Newberg gets out much, as online there has been quite a lot of advertising, and in cities like Berlin and London, for example, their city gTLDs have been promoted widely. But yes, at least some, probably not most as Newberg writes, of the new gTLDs will fail in the next couple of years.

“According to the statistics,” Newberg also writes, “approximately 1.8 million domain names have been registered across those 200 domains, for an extremely low average of 9,000 domain names per gTLD.  But those numbers are misleading as the actual number of registrations is far lower.  Many gTLD registries have taken to reserve names in dummy registrations either to sell them later for premium prices or to pump up their numbers, or they have given domain names away for free just to make the gTLD seem popular.  For example, the #1 gTLD registry right now is .XYZ with a staggering 25 percent of all registrations (almost 450,000).  However, only a small fraction of those domains have been paid for by actual end-users or even domainers investing in the name—some have stated that .XYZ appears to have a goal of getting to a million registrations whether those registrations are paid for or not.  Even where the numbers have not been artificially inflated by the registries, many of the domain names were bought early by domainers hoping to flip the name for profit.  When one looks at the actual number of end-user registrants—importantly, they are the registrants likely to actually renew registrations when they come due (typically in a year)—it is hard to imagine the total actual number being outside the mid six-figures.”

The success of gTLDs may depend on large brands Newberg notes. Newberg considers “a profitability threshold well above 10,000 names.  It is possible that many of the gTLDs will do their best to stick around for a year after launching general availability, see what their renewal figures are, and then close shop if the numbers do not meet whatever threshold they have set for themselves.  Ironically, their survival might depend on the success of the .BRAND TLDs, almost none of which has launched yet.  The large brands that have applied for TLDs have the money to market their new TLDs if they so choose and make their new TLDs a key part of their marketing strategy.  If they do, and if the public latches on, perhaps that will fuel interest in the non-brand gTLDs.  If not, the whole system could fail and few will have the stomach to apply for more gTLDs when the second round comes around.” Which is a pretty fair point.

Brand protection is also an issue that brand owners need to be aware of across the new gTLDs, just like they should be vigilant about across existing gTLDs and ccTLDs. Newberg writes about three options for brand owners, these being “1) paying approximately $3,000 for a block across the gTLDs run by the registry ‘Donuts,’ since Donuts operates a significant number of TLDs and $3,000 is less than what it typically costs to go through a Uniform Domain-Name Dispute-Resolution Policy (UDRP) proceeding; 2) putting important marks on the Trademark Clearinghouse List (TMCH), and responding to the TMCH notices when a threat arises and monitoring for cybersquatting and typosquatting as usual; and, 3) registering domain names for important marks during the Sunrise period for gTLDs associated with a company’s particular industries.”

Overall there are some good points. But it’s worth noting the ANA has been hostile towards the introduction of new gTLDs. And they’re a US organisation and while they represent multinational brands in the US, they don’t seem to be well aware of the domain name industry outside of the US. Such as that there are 248 ccTLDs that already exist and brand owners should be dealing with the ccTLDs in much the same way as they deal with the gTLDs.

To read the ANA blog post in full, go to:
www.ana.net/blogs/show/id/31435