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Brand managers: You've been hearing about the generic top-level domain (gTLD) registration expansion for a while now. What are top-level domains, and what do they have to do with your brand's existing digital presence and strategy?

A top-level domain (TLD) is the portion of a website address that is to the right of the dot, such as .com, .net, .org, or .biz. Currently, we have only 22 top-level domains, but that number is set to grow substantially with the debut of more than 1,400 new TLDs starting in 2013.

In June, ICANN, the nonprofit responsible for overseeing the domain name system, released a list of some 1,900 applications for new TLDs, providing an early glimpse of which will be most popular. Some of those TLDs are hotly contested, such as .app, for which 13 entities applied. One small business applied for more than 300 TLDs, including .bargains, .discount, and .world. And, yes, someone thought of .sucks, with three companies vying to build a business around the term, evidently judging that many brands will value a central location for customer complaints.

So what should a digital brand manager do to prepare for this expansion? Let's look first at some of the potential challenges and benefits offered by the new TLDs and identify some guiding principles that will help you address them.

Potential Challenges—or Opportunities?

Do those new TLDs represent an opportunity for the brand to reinforce its digital presence or open up new possibilities? If you are in the footwear business, does it make sense to have a presence in .fashion, .style, or .shoes? What about the sporting goods manufacturer thinking about .sports, .basketball, or .golf? Does .shop or .sale make sense for retailers and e-commerce operations?

And, that's not counting the geographic TLDs, like .nyc, .paris, .tokyo, or .sydney. If your brand has a presence in any of those cities, does it make sense to register your brand as a domain in those TLDs?

Or are these TLDs just another headache in the making from cybersquatters who take advantage of brand names and scammers who steal brand-bound Web traffic? Currently, major brands dedicate more than 90% of their domain portfolios to defensive domain registrations. If even 20% of the new TLDs apply to your brand, you could be faced with a major expansion of the defensive portion of your portfolio, which could add a significant financial burden.

Most likely, the domain name expansion offers some opportunities as well as some risks. Now is the right time to examine your domain portfolio and identify where you can free up funds in the budget by dropping names that have outlived their usefulness.

Three Essential Steps

I recommend a structured, three-step process of rethinking your domain name portfolio as you consider how best to meet the coming domain name expansion.

  1. Scrutinize (and purge!) your current domain name portfolio.
  2. Develop clear policies on future registration (internally and externally)
  3. Keep an eye on what's yet to come.

Let's break each of these down.

1. Scrutinize (and purge!) your domain name portfolio

Use the upcoming change in the digital environment to pare back your portfolio. What are the best candidates for purging?

Look for unused domains:

  • Do you have domains registered for products that never launched or have been retired?
  • Do you have domain names for sweepstakes or promotions that ended and won't be revived?
  • How about domains registered in countries in which you no longer do business?

Look for unproductive domains:

  • Is a domain no longer driving traffic due to a change in semantic patterns?
  • Does a word that once made perfect sense for your brand now have a different connotation that you do not want associated with your brand?
  • What about domains that were bought defensively but do not attract traffic?

Keep those domain names that are still useful, and lose those that are not. Don't overdo things, though, because buying back a domain that you once owned can be very painful—and expensive!

2. Develop clear policies

In addition to reviewing your domain portfolio, now is also a good time to review domain management policies.

Those policies should cover when new domain names should be registered—for instance, for product launches and marketing campaigns. Geographic expansion may trigger new domain name registrations, such as when your business expands to a new country or even when a particular country liberalizes the policies for use of its TLD (known as ccTLDs, for "country code TLDs").

Your policy review should provide domain registration guidelines for important brand variations, common misspellings, or even combinations of terms, such as "brandshop" and "shopbrand."

While you conduct your policy review, make sure those policies clearly identify which employees have the authority to...

  • Request new domain registrations.
  • Approve new domain registrations.
  • Modify your domain portfolio.

Authority for modifying your current portfolio is especially sensitive. Ensure you have clear policies and safeguards around that activity, both within your organization and with the domain name registrars who operate on your behalf. Over the last year, we've seen so-called hacktivists targeting familiar domain names and modifying registration details to make an ideological point.

3. Keep an eye on the future

Some 600 applications have been made for .brands; that is, in which brands applied for TLDs in their own name and for their own uses. Since the application period is now closed, brands that wish to apply for their own .brand will have to wait until applications are accepted again. ICANN has not released a date for when that will happen, but it may be anywhere from a year to several years before the application window reopens.

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Whatever this historic expansion brings, from new promotional opportunities to the need for additional defensive measures, the big winners will be the brands that use it to forge a stronger association between their brand and their Web presence.

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Frederick Felman is the CMO of MarkMonitor, a brand protection company.