New top level domain name operator explains its cheap pricing strategy and new “brand protection” tier.
Famous Four Media’s recent top level domain name launches have quickly catapulted to the leaderboards, with domains such as .science and .party growing to hundreds of thousands of registrations.
The secret: the registry offered marketing incentives enabling registrars to price these really low, so people were able to pick the domains up anywhere from $0-$1.
I asked Andy Churley, Chief Marketing Officer for Famous Four, about this go-to-market approach. He also discusses the current state of new TLDs and the company’s new “brand protection” pricing.
DNW: What do you think of the current state of launched top level domain names?
We are still at a low level of maturity in the evolution of this new namespace. We have seen plenty of different go-to-market mechanisms, some are working while others seem doomed to failure. We have seen the effective death of sunrise, something that traditional domain registries have counted on in the past to provide the marketing funds to actively promote their TLDs in GA. Also, the entire industry is waiting with baited breath for the first of the household name .BRANDs to actually start using their domain endings in their marketing campaigns.
So, at this point in time, the whole industry is somewhat in limbo. ICANN refuses to spend any serious money to engage in mass market ‘educational’ campaigns, registries cannot afford to spend money marketing to end users and registrars are also reluctant to engage in awareness campaigns because they have seen other well-known registrars catch a cold by doing exactly that.
DNW: Your first TLDs had prices similar to other new TLDs. Since then, you’ve started offering domains for free (or very cheap). As a result, .science and .party are in the top ten. Why did you change strategy?
Part of my role as Chief Marketing Officer is to look at the cost of acquisition for the range of marketing mechanisms at my disposal. Having looked at the traditional marketing outreach model employed by .CLUB, although a fantastic campaign for the registry and the industry alike, it became clear that for a portfolio applicant like Famous Four Media the cost of acquisition of this type would simply not be sustainable.
So we had a re-think and chose .SCIENCE as the test subject. For us it was the perfect TLD to try a radical kick-start outreach programme. It is a globally recognised term that has a broad, global community of enthusiasts that we were sure would support the .SCIENCE registry and actually use .SCIENCE domain if price were not a barrier. Since registries are forbidden to sell direct to the end registrant, we had to use the registrar channel and decided to use short–term discount pricing as a marketing mechanism to encourage registrars to get on-board, pass on these price reductions to registrants and to kick-start registrations. Since .PARTY shares a number of the same facets as .SCIENCE we decided to use the same approach and, so far, it is working as expected.
Bear in mind that the registry offers all participating registrars short term marketing incentives in the form of registry credits. Famous Four Media does not mandate the retail price of its product. Registrars are free to decide what price level to set. Some registrars have passed on the entire incentive to their customer and prospects, some only a portion and some have decided to maintain their prices and keep any extra margin for themselves. All three are valid approaches and registrars will do what best fits their customer segments, marketing approaches and their revenue models.
For Famous Four Media, it is no secret that the new gTLD program is a long-term growth business. Other registry applicants that came with the idea of getting rich quick have quickly disabused themselves of that notion and a good number have even walked away. Customer acquisition has to be undertaken in a cost effective manner. We are launching 10 more registries this year and will develop a registry marketing strategy to fit the business model for each of them.
DNW: With low prices, how do you prevent your domains from becoming havens for phishers, spammers, etc?
We employ the same mechanisms as other registries. We always encourage brand owners to register in Sunrise in order to protect their brands. We react to UDRP and URS decisions, as well as other domain complaints responsibly and rapidly and, as an additional measure, we randomly visit domains in the registry to check that they are being used responsibly. I can report that, despite having over 300,000 names in the .science registry, it is not seeing any noticeably higher rates of cyber-criminality than other registries.
Just like any other registry operator, Famous Four Media wants its registries to have websites attached to every domain name because this ensures renewals and encourages further registrations. In .SCIENCE it is the global scientific community that will determine whether or not the .SCIENCE registry is successful or not. As things stand today we are delighted with the way that .SCIENCE and .PARTY have grown.
DNW: Most domain names have been registered at AlpNames. How is this registrar connected to FFM?
AlpNames is one of the group of registrars that has decided to pass on marketing incentives, that Famous Four Media is offering to its registrar network, to its prospects, presumably to drive sales. While it is physically located in the same geography as Famous Four Media, its business operations are entirely separate.
DNW: Do you plan to offer future domains at low prices, or is this just a “test”?
Famous Four Media’s initial go to market phase of GA has recently involved marketing programs that use heavy rebates to incentivise registrars. A number of them, but by no means all of the registrar community, have decided to pass on those rebates to their customers in the form of very low cost domain names. However, Famous Four Media has separate marketing programs, strategies and measurement criteria for each of its extensions. There is no doubt that Famous Four Media will adopt the .SCIENCE model for some of its TLDs, since it has proven to be a resounding success by our measurement criteria. For other TLDs we will use different marketing mechanisms in order to achieve the goals of that registry.
In order to provide an additional measure to protect against cyber-squatting, for those extensions which may be using an aggressive early adoption incentive, Famous Four Media has introduced a Brand Protection tier for the most cyber-squatted marks to help discourage the registration of those names by 3rd parties.
Famous Four Media always encourages brand owners to register their domain names in Sunrise. However, for those that decide not to, or which own Trademarks that are not registered in the TMCH (and are therefore ineligible to register domain names in the Sunrise Phase), the brand protection tier will help protect their marks against cybersquatting and the necessity of launching a costly and uncertain URS or UDRP actions.
Famous Four Media’s wholesale price point for the brand protection tier has been designed to provide a financial deterrent to cyber squatters without being an obstacle to Trademark owners. Therefore, Famous Four Media has priced the brand protection tier in line with the equivalent cost of registering a mark in the TMCH and registering the domain name in sunrise. Renewals, of course, will be at standard registration rates. Famous Four Media wants to encourage Brand Owners to register their Trademarks with the TMCH in order to benefit from the early warnings and access to the Sunrise phase registrations of all available domain extensions not just those under Famous Four Media management.
What has become very clear is that there is no magic bullet, no one size fits all in this industry. If there was, it would make the job of bringing these new TLDs to market rather dull!