auction-paddle

Why Some Brands Stayed Out of First Dot-brand Auction

  |  September 11, 2012   |  Comments

Brands that woke up to the gTLD party late can now partner with a company that owns a gTLD, acquire one, or wait for the next round of applications, which could be years down the line.

Brands that missed out on the first auction of generic top-level domains still have some time to figure out their strategy before the first so called dot-brand extensions are issued. While little is known about how these new domains will fair against the prevalence of dot-com sites, no brand wants to be caught empty handed and without a gTLD strategy.

"This is in many ways just kind of a second bite at the apple for those that might have missed out on the first dot-com boom of domains," said Eric Johnson, CEO of Ignited, a Los Angeles-based agency. "There's a lot more of them and thus there's much more volatility in value for these things or lack of clarity."

Johnson has been advising one of Ignited's clients that bid on a gTLD earlier this year, and is now guiding the company through a series of ideas and opportunities that could work in their favor. However, he isn’t convinced that every top-level domain will carry inherent value. That will largely depend on how the owner of each property decides to invest in these domains in the first place.

So what about those brands that missed out on the rush to acquire gTLDs? "If they had their head in the sand when this was happening, they might want to sit up and listen. "It's like undeveloped land. You could sell off the land. You could develop the land, or develop some of the land," he said. "I think there will be some entrepreneurs that will figure out how to do this in a big way."

Brands that woke up to the gTLD party a little late can now partner with a company that owns a gTLD, acquire one, or wait for the next round of applications, which could be years down the line.

Most brands were completely caught off guard, said Jennifer Wolfe, president of Wolfe Domain, a gTLD brand strategy advisory firm. "I think that one of the key problems was the only people talking about this inside companies [were] trademark lawyers and they've only been talking about brand extension," she said.

Karl Issacc, executive director of digital branding at Landor Associates, took that idea one step further in a webinar on gTLD strategy organized by Columbia Business School. "It's probably only going to make sense for a very specific set of companies to apply," he said. "We see a lot of people out there thinking about the value they're protecting instead of the value they're creating. Innovations enable value creation for those that are willing to take a risk," Issacc continued.

While gTLDs present brands with "infinite terrain," as Johnson put it, the sheer volume of potential name combinations caused many brands to hold off completely. For example, Wolfe thinks most of the consumer goods companies stayed out of the process because they house too many brands. "It was too much for them to determine where this is going to go," she said.

Johnson is anticipating a tremendous amount of licensing activity. Some brands are already sending out letters to the potential winners to either indicate their interest in a partnership or to warn others away from associating their brand with the gTLD in question.

"There's a unique amount of control the winner of the bidding gets, and they can do as much or as little as they want to," Johnson said. "It's a bit of a guessing game, but clearly there's going to be a lot of money transacted as this begins to roll out and these licenses are issued."

Many of the generic terms will be licensed out, he added. "It's unclear whether that strategy will be successful, but it's highly likely that some of these will become lucrative."

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ABOUT THE AUTHOR

Matt Kapko

Matt Kapko has been writing about mobile since 2006, before it became cool. Based in Long Beach, CA, he has covered mobile entertainment, digital media, marketing, and advertising for several business media outlets. A former editor and reporter for RCR Wireless News, paidContent, and iMedia Connection, Matt is a regular freelance reporter for ClickZ. You can follow Matt on Twitter at @MattKapko or drop him a line at matt@kapko.co.

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