Domain name price hikes: what do they mean for our businesses?
The critics of UK registry operator Nominet look no closer to being silenced.
You might have heard the news that from March 1 2016, web addresses ending in ‘UK’ will cost us more, rising from £2.50 to £3.75.
While this is not a huge price hike per address, it will inevitably bag Nominet a considerably larger intake from their sale of domain names. 50% larger, to be exact.
The majority of gripes for online businesses as a result of this development, and throughout Nominet’s turbulent history in general, is that Nominet in principle is intended to be a non-profit organisation, with most proceeds being directed into a trust fund for the greater good.
While the good work of the Trust, which helps start-ups in the social tech sector, cannot be denied, it is the spiralling salaries of the Nominet board that has raised eyebrows as to the motives of the price hike.
The introduction of .UK domains was controversial, and opposed by many outside Nominet. The arguments against the new domains were strong, and Nominet did little to answer these concerns.
To summarise, there was no convincing business case for the new domains and, as businesses would be effectively forced to buy the new domains to protect their brands, then they equated to a tax on digital businesses.
Indeed, it completely ignored the overwhelming opposition to the proposal it found when consulting and ploughed on anyway.
This is how Nominet CEO Russell Haworth justifies the price hike:
Costs have risen considerably since we last changed the price, and we need to compete in a promotion-driven industry. We won’t compromise on the quality of our service or dial back our efforts to counter cyber-threats head on. However, it’s important to us that .UK domains represent value for money as well as quality, and the price we have set reflects that.
But what will it mean for the majority of companies with an online presence in the UK? The answer is, an extra £1.25 per domain name.
In reality, companies looking for suitable domain names, and the agencies which bulk buy them, will still line up to pay what Nominet are asking. Why? Because a domain name can be critical to the SEO potency of our business.
To go through the full extent of a domain name’s power would probably take up a whole series of blogs, but it is worth underlining that for £3.75, or whatever a third party agency will charge you, a domain name can certainly provide you with a return on investment in SEO terms.
Coupled with the right combination of keywords, a domain name can give you an SEO edge straight away. A URL that is an exact match domain (EMD), or in plain English, contains a premium keyword, can provide a boost.
Google has diluted the impact of EMDs, and they may not work so well in competitive verticals, but they can still offer an advantage according to some.
A canirank study from last year found that keyword domains rank 11% higher on average than branded domains. It found the following:
- Branded domains needed an average of 40,000 more links to hit #1, and 35,000 more links to reach the top 10.
- Keyword domains were able to hit position one with half as much content, and only using the keyword half as frequently.
Whatever the SEO effects, research also shows it is more ‘clickable’, giving you the possibility of directing more potential customers to your website.
Then there are the brand benefits. For many SMEs a sought-after domain name adds a mark of credibility to their online presence, while also providing an opportunity to rubber stamp your brand name by choosing a matching domain name.
For the above reasons, and many more, domain names are a necessity rather than a luxury in today’s online business world, meaning Nominet could feasibly charge £37.75 and still see a steady stream of buyers every day of the year.
In my view, the safeguarding of Nominet as a non-profit organisation which provides budget-friendly domain names to UK businesses is essential.
While the Trust performs a positive role in helping the UK’s social tech start-ups, Nominet can continue to encourage the growth of UK business as a whole by keeping the price of URLs as low as possible for as long as possible.
