2014-10-28

Why Dilute Your Brand With A New gTLD Domain Name?

If you do not know what "brand dilution" is, start here.

Year 2011Advertisers rally behind trademarks to oppose ICANN – but is it too late? - Blog - World Trademark Review: "... the ANA, which represents more than 10,000 brands that spend over $250 billion in marketing each year. The association’s chief executive, Bob Liodice, recently wrote to ICANN to say: “By introducing confusion into the marketplace and increasing the likelihood of cybersquatting and other malicious conduct, the ICANN top-level domain programme diminishes the power of trademarks to serve as strong, accurate and reliable symbols of source and quality in the marketplace." In a statement that will resonate with the trademark counsel who have followed this policy for years, Liodice added: "Brand confusion, dilution and other abuses also pose risks of cyber predator harms, consumer privacy violations, identity theft and cyber security breaches."..." (emphasis added)

YEAR 2014Rush for ‘luxury’ domain names continues | New York Post is the headline in the puff piece -- here's the reality:

Total Domain Names registered under new gTLD .LUXURY -- (data source: RegistrarStats.com, Oct 25, 2014) --





That's no "rush" in my view, that's "pathetic." According to safenames.net, .LUXURY has been in "general availability" since April 21, 2014.

All the new gTLD "true believers" who believed the hype and are now stuck within the developing disaster known as ICANN's new gTLD domain names programforgot (or were completely ignorant of) the fact that brands do not want brand dilution. And yet, most new gTLD domain names are the ultimate in brand dilution! (See quote near the beginning above.) The implicit brand dilution inherent in most of the new gTLDs was part of the rationale used by the proponents for the whole program, and was also a reason why most trademark holders and brands were so opposed to it. With most of the new gTLDs, the intent was to make the TLD extension itself (that which appears to the right of the dot) part of the "branding." For example, new gTLD proponents argued that luxury goods retailers would want a .LUXURY domain name extension. But is that really true?

Luxury by another (domain) name (source: theage.com.au): "... But will brands that have become a byword for prestige, quality and exclusivity – the likes of Rolls-Royce, Rolex and Tiffany & Co – jump at the chance to associate themselves with the L-word? Several spoken to by Executive Style expressed reservations. “Why would we brand ourselves in such a way?” one asked. “Our product speaks for itself.” Hugo Boss Australia spokeswoman Chauntel Scarr agreed. “I would say that Hugo Boss would not feel the necessity to align to a luxury domain as we have spent years building our brand into the luxury realm,” she says. “To then brand it as luxury in a domain name seems unnecessary and forced. If it can be bought then it is usually not as it seems.”..."

So here we are in late 2014, and the market has spoken--among all (current and future) domain name TLD extensions, .COM is the best and most "trusted brand" for commercial enterprises, and .COM does not dilute the brand name to the left of the dot. This will continue to be true for the foreseeable future. Anyone who tries to tell you that a $488.88 annual registration fee for a new gTLD domain name is necessary to enhance your brand, is trying to separate you from your money by selling you, in my opinion, a mostly worthless domain name that may, in fact, be damaging to your brand name.

This is just one more reason, among many more, why most new gTLD domains are a #FAIL.

If you have already fallen for the new gTLD hype, there is still time to change your domain name extension to the "trusted brand"--

Brand Equity Dilution | MIT Sloan Management Review: "It is interesting to note that there is a silver lining to unsuccessful “market failure” brand extensions, those that fail because they are inadequately distributed or do not achieve sufficient awareness among consumers. Because consumers might not have even heard of the extension product or service, the parent brand is more likely to survive relatively unscathed."

Caveat Emptor!




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