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Key success factors for Internet extensions: an evaluation grid
21 October 2019 - Loïc Damilaville
It isn’t always easy to explain the whys and wherefores of domain name market trends. Major indicators such as growth are usually generalised, given that they are based on data common to all stakeholders, but the causes behind fluctuations are hard to pin down. And structural causes need to be separated from cyclical ones, which may be the source of major variations, as was the case with the domaining waves in China, without actually reflecting long-term market trends.
At a finer level of granularity than the market as a whole, we have the major extension segments: Legacy, country-code TLDs, new TLDs, and those that extend even further to .CORP / .BRAND and geoTLD, etc.
Might it be possible to develop a common key to understanding all of these “levels” of granularity that, without going as far as to explain it, at least clarifies the structural causes of the trends observed for both the domain name market as a whole and a simple extension? That is the exercise that we are applying ourselves to here, proposing a model called the “7As” in reference to the first letters of the words that make it up.
1) Awareness
The first “A” is certainly the best-known market factor, as it is so often used with regard to new extensions as an explanation for the disappointing results shown by a number of them. It also relates to an objective reality: domain names in general such as new TLDs still suffer from a certain lack of awareness among the general public. Businesses are gradually getting there, but micro-enterprises and VSBs are still having trouble with this aspect of their Internet presence. Most private individuals are simply unaware of this precious tool for consolidating their online presence.
2) Amplitude
This term stands for a TLD’s volume potential in terms of target audience and catchment area. Situations vary immensely here, ranging from “open generics” with global reach to “closed” TLDs targeting specific owners. From the highly restrictive .BANK, to the .COOP for cooperatives, for example, which cannot really be consider as “failures” when they achieve tens of thousands of names. As for ccTLDs, which usually have local reach, Amplitude will depend to a large extent on the spread of the Internet in the particular country.
3) Advantage
This factor relates to the advantages generated by the TLD for both clients and the registry with its registrars. It’s the “value-added” in the wider sense that will explain why registrars will be more or less inclined to suggest this TLD to their clients. To a great degree, Advantage covers the marketing aspect of extensions, based on their meaning and possible use for commercial purposes etc. If this aspect is too weak, the TLD won’t attract anyone, registrars won’t suggest it and the registry will end up dropping it to cut its losses.
4) Access
The fourth “A” stands for a key factor for the success or failure of many TLDs: market access, meaning their capacity for being listed with the right registrars for the target audience. The .COM option is certainly the most listed, and almost all ICANN registrars have it. By way of contrast, some TLDs are only issued by a handful of registrars, which can compromise their development. ccTLDs are often marketed by their own local registrar networks, a minority of which have the sole status of “ICANN registrar”, although this does not prevent them from developing a dense network across national territory.
5) Adoption
Are domain names – and lower “level” ones such as this or that extension – seen as “must-haves” or “nice- to-haves” when it comes to Internet presence? The answer will often depend on the target audience, but we can look at the example of .CORP / .BRAND, which are currently “nice-to-have” for major groups but might become “must-have” in a few decades. By the same token, a VSB can still exist on the Internet without a domain name but, the more entities increase in size, the less they can afford to stop at just one or two domain names.
6) Activity
A TLD will last if it is economically viable, but also if it can be sure of a good renewal rate. This relates in part to the use that owners make of the names. Is it sites providing content and functionalities that can extend as far as e-commerce? Or is it just parking pages or websites generated automatically but of no interest to visitors? The “Activity” factor takes account of the use made of the TLD, both as a percentage of names “actually used” and in terms of the quality of the websites on which they are focused.
7) Affect
Last but not least, “Affect” is also about the renewal rate, representing the retention rate that goes beyond the actual level of usage: the creation of a virtual brand and Internet ID identity attached to the domain name, or quite simply the fact that the owners feel a kind of affection for an extension that reflects them (hence the relative success of geoTLDs, no doubt).
We can see that the relative importance of the various key success factors varies greatly depending on the TLD and the segment. CORPs don’t need a distribution channel (“Access”) for example, but their managers need to make sure that they link them up properly with the Group’s digital strategy, or there will be little “Advantage”, possibly leading to dropping the extension. Some issues like “Awareness” are common to all segments, whereas others are extremely important to just a few. This makes volume a useful indicator of success for TLDs with strong “Amplitude”, but is of no use to those targeting markets that are by nature highly focused.
Though incomplete and sketchy, this model can provide registries and TLD applicants with useful analytical tools. The more “global” it is, the greater the number of factors to be considered and the higher the standard of requirements. The ill-advised avoidance of any of them will not be without its consequences.
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