As chairman of the Association of National Advertisers, I read Alexa Raad's Aug. 16 and Edmund Lee's Aug. 22 pieces in Ad Age with great interest, hoping to understand why adding new TLDs (Top Level Domain names) would be an opportunity for brands and would create a better internet experience for our consumers. Unfortunately, I was not persuaded.
By every calculation I've seen, including estimates by ICANN's own experts, it will cost companies like mine hundreds of thousands of dollars to police their trademarks regardless of whether they decide to participate and buy a branded domain or register on other new generic domains, e.g., .computer. Those costs, when weighted against the purported benefits promised, simply don't add up.
But there's a lot more than just the out-of -pocket costs that will eventually have to be passed on to consumers. The dilution to brand equity can never be recovered. Brands have fought against domain-name pirates to fend off attacks on their brands and maintain their relationships with consumers ever since the worldwide web first became a marketing channel.
As marketers embraced the medium, it became a stronger and more robust resource for consumers, driving down costs, creating new and exciting innovation, and offering an interactive, targeted world that respects consumers. Today, the environment is relatively stable and dollars are being invested to make it even better, both for what it offers consumers and the protection of their privacy and sensitive data. To suddenly add what could be hundreds of new TLDs, none of which are needed, is a terrible idea.
There is no reason to believe the benefits for companies and consumers touted by ICANN and others who would benefit from new TLDs would actually occur. One only needs to look at the "success" of the last string of new TLDs ICANN introduced in the past 10 years -- .biz, .info, .travel, .jobs, .tel, .name, .coop, .museum, and .mobi -- to see that ICANN's promises are not just speculation but are, in fact, fantasy.
Nor is there any evidence that we need new names due to the scarcity of available domain names in the existing TLDs. Even past ICANN Chair Ester Dyson debunked ICANN's theory of scarcity. The truth is that search engines like Google, Yahoo and Bing solved any problems associated with finding what a consumer wants on the web years ago. And today, new search technology such as Blekko, Qyo and DuckDuckGo are improving search and innovation every day, making the search market intensely competitive. That competition and innovation offers consumers simple ways to find what they want intuitively without the necessity of remembering one of hundreds of TLD addresses. Technology found a way around complexity.
From all I've seen, no matter how one tries to justify ICANN's process or the benefits it speculates will occur, it is simply impossible to defend the economics of the ICANN proposal. That is the Achilles' heel of this entire exercise. To paraphrase an old saying, "It's the economics, stupid."
The economics of ICANN's claim of more competition and innovation just doesn't add up. That's proved by the failure of the dozen TLDs they introduced in the past 10 years.
The economics of a claimed "need" just doesn't add up. There is no scarcity of domain names. Search engines long ago solved that problem and internet users can find whatever they want easily and quickly with a few clicks.
The economics of ICANN's justification that the purported benefits outweigh the costs to brands just doesn't add up. Even with the protections offered under the program, the costs are staggering. The protections offered are like putting a Band-Aid on a severed limb.
The economics of ICANN's claim of benefits to consumers just doesn't add up, particularly in a down global economy. All of the costs will be passed on to consumers, the supposed beneficiaries of this ICANN initiative, all without proven consumer benefits.
The only economics that do add up are the financial benefits to ICANN, domain-name sellers and domain name hijackers, none of whom add one iota of value to building brands, protecting consumers, or supporting vibrancy in the marketplace. And, of course, trademark lawyers will benefit as well.
Bad economics by every measure.
ICANN is proposing a solution to a problem that does not exist; and creating a level of complexity and unwarranted expense to every brand. Its proposal adds complexity to an open platform which is working well.
The ANA marketing community and major marketing organizations want ICANN to reconsider this ill-conceived proposal and reverse what will cause irreparable damage to brands.
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