Will End Users Buy New gTLD Domains? New Survey Says Yes

According to new research out today which asked end users if they would have interest in registering generic new gTLD’s found there is a lot of interest in end users to register domain names in a new gTLD that matches their vertical such as  .shop for stores or .law for lawyers.

Commissioned by ARI Registry Services, the new study was led by Dr. David Neal, director of Empirica Research, and aimed to identify whether small and medium sized businesses (SMBs) will buy into the new program.

Dr. Neal said: “Surprisingly, nobody had stopped to ask if restaurant owners would actually buy a domain within .restaurant, or whether lawyers will buy one within .law.”

The survey findings suggest that a high percentage of them will, even if this means paying a premium over their current web address.”

In the survey of 200 SMBs across a range of industries, findings indicated high potential to monetise new Top-Level Domains: • 49% of SMBs describe themselves as likely to register a web address under a new Top-Level Domain related to their business

SMBs are willing to pay substantial premiums to own an industry-specific web address, stating they’d pay 47% more than what they pay annually for their current address

Had the opportunity existed when they were starting their business, 44% of SMBs said they would have bought one at the time.

The study was commission by ARI Registry Services whose CEO Adrian Kinderis, is quoted as saying in the PR out today on the report

“These results are encouraging considering it’s a new concept and awareness is still low among businesses. The findings demonstrate a strong demand in the market for new Top-Level domains.”

SMBs perceived the most significant value in industry-specific web addresses to be the possible advantage within search engines, the ability to better match a domain name to their business and the potential to increase purchases from international consumers.

SMBs also showed interest in Internationalised Domain Names (IDN) which will allow domains in non-Latin languages such as Chinese or Arabic.

54% of SMBs who have customers that do not speak English said they were interested in owning an IDN.

Chinese IDNs were nominated by 90% of SMBs.

Additional research was conducted via in-depth interviews with renowned entrepreneurs, including Jake Winebaum, former President of Disney Online, and Tony Chow, an Asian expert in digital media and creative entrepreneurship.

The study goes on to say

“There are 219,000 retail stores in Australia and 20% of them are likely to register a web address within a .shop new Top-Level Domain. This yields a potential customer base of 43,800 retail stores willing to pay $126.5 AUD per annum – resulting in a total annual revenue of $5.54 million AUD for a .shop new Top-Level Domain – generated from Australian retail stores alone.”

“Adding Singapore and Hong Kong’s retail stores to the business model results in a potential annual revenue in the order of USD $7 million.”

“The research was conducted in September 2011 with 200 small and medium sized businesses based in Singapore, Australia, and Hong Kong. Survey respondents were all owners, CEOs and Managing Directors and represented a broad cross-section of industries.

Empirica Research is an international social and consumer research firm based in Melbourne Australia. Founded by academics, Empirica specialises in applying scientific rigor and the most advanced research methods to business and social research.

You can download the summary report here (pdf)

Comments

  1. Mike Jarema says

    Michael — thanks for the post but I have to say I’m a bit skeptical of these results. I have yet to see a travel agent/company successfully use the .travel TLD. Nor have I seen .museum used at all.

    I’m interested to see how the survey was conducted, the actual questions asked. I’m worried that the fact the surveyor is invested in the success of new TLDs, that the actual survey was as much of a sales pitch for industry-specific TLDs as it was a tool for predicting SMB behavior.

  2. Ron says

    End user perception, and consumer perception are two different things, I think the tld will take many many years to get through the head of the dot com locked in consumer. Travel has been a bust, a one off doesn’t set an industry standard.

  3. Michael H. Berkens says

    Ron

    I would counter the .travel argument as there will be hundreds of these rather than just one trying to carve out a market.

    of course .travel was also restricted to just travel agents that were licensed as such

    the more restrictions placed on the extension the less registrations it will have.

  4. says

    Mike will the hundreds at a time actually be a negative ? I think it will, if .shop could be out there on its own, maybe it has good marketing plan and gets some real good numbers. There are going to be so many it could just be information overload.

  5. Alan says

    The “survey” was conducted by a domain “registry service” who wants to sell the new tlds so I’m skeptical too. Had it been commissioned by someone outside of the industry, like a retail business association, I might be more willing to believe it.

    Bthw, I’m sure most end users would have said the same thing about .co or .mobi before they were released.

  6. Michael H. Berkens says

    RH

    You could be right but IMHO when there are a lot of new extensions launching with brands like .nbc, .fox, .cbs, .mtv, .apple, e and hundreds marketing at the same time, more people will get it sooner than later that they have to pay attention to what they type into the right of the dot just like they do now on the left of the dot

  7. says

    from the report –

    ▪▪ Less than 15% of SME owners know about the new Top-Level Domain (TLD) program
    ▪▪ However, when educated about the program, 49% of SMEs describe themselves as at least moderately likely to register a domain within a new TLD related to their business.”

    A new gTLD company who has been instrumental in driving new gTLDs through ICANN (or their survey company) has educated 170 or so people about new gTLDs and they say they 49% are at least moderately likely to register a domain within a new TLD”

    (Oh and thats 200 or so people are in Australia, Hong Kong & Singapore)

    And on average in Australia they are willing to pay $120 a year for new gTLD reg. whereas in Hong Kong they are willing to pay over $200, a year.

    Hmmm…

    There was a survey going around earlier this year before new gTLDs were approved and a reputable organization said a huge percentage of business people were considering new gTLDs.

    We took that survey and the presentation of the questions were very different from presentation of the results. What they basically asked was would your organization rule our applying for a new gTLD ever? Who was going to say their organization would never consider applying for a new gTLD?

  8. says

    I’m firmly convinced that it’ll be many (…many) years before a single on of these (new) gTLDs are approved and in use…with some exceptions, e.g., cities, zip codes, surnames.

    But every time legal objections are raised about a particular gTLD, which then requires a decision to be rendered by a court or administrative body, the interim value of dot-coms will increase.

    The real traction here will likely come from wealthy families (and family offices), who will snatch up their right-of-the-dot surnames; but more for bragging rights and marketing purposes than for some technical or security-related reason.

  9. says

    Keep in mind that a TLD does not require tons of registrations or a domain after market to be considered a success.
    .AERO is heavilly restricted and yet they been around for sometime now.
    Only new gTLD’s where there is money to be made as a domainer is going to be intresting the rest willbe not worth getting.

  10. 492 says

    people might pay registrars to register domain names under new gtld’s, just like they paid to register .co or .mobi domain names (or a host of others that get no traffic), but unless you are a gtld program beneficiary, such as a registry or a consultant to one, the more pertinent question is whether end users will type or click on these domain names.

    otherwise why would anyone want to own them?

    except to protect their trademarks.

  11. James says

    Talk to the man in the street and he’d probably say the same thing. Means nothing really to the domain market in my HO.
    Ask the same people in 5 years and see if they wish they’d bought the corresponding .com also. I know that sounds like I’ve lifted it straight from RS’s posts but I feel it’s true – .com has got so much mindshare that it will still be king for at least a couple of generations. Anything else is at best, second best.
    And after .com surely you must come to ccTLDs – here in the UK we quite like .uk – I can’t for the life of me figure out how .us has been so dismal. It’s short, and most countries refer to America as ‘The US’…if that can’t get mindshare among some of the most patriotic people in the world, I can’t see much future in most new TLDs.

  12. LS Morgan says

    Will they buy them? Sure. Anyone can buy a domain name.
    Will they use them? Some will.

    The real question is- how long before we see the day when a meaningful web application is developed on one? Right now, SME’s might use a .net, a .info or a .us and they’re perfectly adequate for that. If your objective is to market to your neighborhood or your city (and not build a global brand), alternate TLDs are just ducky.

    It wouldn’t surprise me to see SME’s adopt the specialty TLDs, which ironically enough may serve to further entrench .com as the preeminent brand for those seeking a broader reach.

    SME’s buy .com domain names too- in some cases, they’re the better customers- so this will probably have an impact on the saleability of lower quality .com’s, but I really don’t think it harms the good ‘industry definitive’ stuff. If it does it does, but I’m betting against that.

  13. Pablo says

    so to start a new business you will need to spend at least 5k to just get going..and not including a good brandable, catchy name….i think the new gtld’s will become, if passed, like the new yellow pages….a directory

    also i wonder how it wil work with voice over recognition ….and search engines how will they rank them?

  14. says

    This paragraph is the most ridiculous propaganda I’ve read since people were trying to amp suckers for VC money in the glory days of 1999:

    ““There are 219,000 retail stores in Australia and 20% of them are likely to register a web address within a .shop new Top-Level Domain. This yields a potential customer base of 43,800 retail stores willing to pay $126.5 AUD per annum – resulting in a total annual revenue of $5.54 million AUD for a .shop new Top-Level Domain – generated from Australian retail stores alone.”

  15. says

    I asked my Father in Law, an avid fisherman, if he was going to build a website about fishing, would he choose ‘.com’ or ‘.fish’ if it were available. His Answer: Both

    I went on to ask “What if you couldn’t get the .com you wanted, or it cost hundreds of dollars?”
    His answer ‘Then I would use the .fish, makes sense, the site is about fishing and the domain costs less.”

    New business, new site, new domain name.

    Makes sense to me, and apparently makes sense to man on the street, too.

  16. says

    @ TomG

    My dad guides for Tarpons in SW Florida.
    I got him Tarpons.com for when he retires and goes full time.

    If I would’ve asked him the same question, he would’ve likely concluded what your father in law did, but that’s because they understand fish, not domain names.

    There are thousands upon thousands of guys with upper incomes who play that game… Is there any doubt that when the time comes and pop takes out some ads, prints up his cards, perhaps puts up a flyer or two- his Tarpon enterprise being defined Tarpons.com is going to put a VERY nice wind at his back? Sure, he delivers great results and that’s what counts, but when he advertises Tarpons.com and yours advertises CaptJoe.fish, there are clients who will intuitively gravitate towards the credibility that they know and understand.

    These guys spend many tens of thousands on boats, motors, accessories, rods, reels, lures, insurance, fuel, tags, permits, guides, hotels and travel in the pursuit of Tarpons, yet I paid nickles and dimes for that.com. Bring on the new TLDs, but don’t tell me that definitive .com domains aren’t still fucking cheap.

  17. says

    @ David J Castello

    “This paragraph is the most ridiculous propaganda I’ve read since people were trying to amp suckers for VC money in the glory days of 1999:”

    Yeah, that is some fuzzy math to put it generously.
    Realistically it is total BS.

    Brad

  18. domainer still not convinced says

    Interesting but I’m still not convinced. I’m all for supporting gtld and etc with speculation and calculated risks

    Imo as rh says it best. I think mass confusion and maybe 1 or 2 extensions out of 100 will make it imo.

    .com will strengthen imo. Values will go up more.

    Is there money be made. Absolutely. Consumer will be so fucking confused what extension is what.

  19. 492 says

    if gtlds become reality and users will be typing anything and everything they can think of “right of the dot”, then this strengthens the likelihood of alternate roots. because there will massive type ins for nonexistent gtlds and let’s face it, not not everyone is going to ignore it. someone is going to monetise that.

    the alternative dns providers like opendns already make bank from non-existent domain names. as do some isp’s.

    how non-existent gtld’s will be different? is it possible that users of opendns and unethical isp dns servers really don’t care about the pages of ads they get from typing nonexistent domain names? maybe they just want something to pop up on their screen besides “Error”.

    if that’s the case, alternative roots that provide something, anything, other than “Error” in the case of nonexistent icann gtld’s make a lot of sense.

  20. BrianWick says

    @492 –
    “someone is going to profit from the mass confusion.
    i think it’s safe ot say it won’t be the consumer.”

    correct – it will be intutive .com’s and their owners that benefit from this confusion

    @Michael –
    “the more restrictions placed on the extension the less registrations it will have.”
    You mean like the wildly successful .mobi dick and .biz , for example, that have no restrictions ?

  21. Muscle Sprouts says

    These new extensions will get a rush of registrants for the next 6-10 years, but as folks mostly fail in their efforts on these domains, the word at the cocktail parties will be to make sure you get a .com if you want to look professional.

    Why will they not look professional??? I want to make a case here:

    You can have the prettiest extension and domain in that extension and still fail. Let’s use this example: single.dating .

    Very pretty domain, right? Right. Well, the problem is not the domain or the extension, but the fact that there will never be any “critical mass” in regards to development in this extension. The reason is, and I have made this point many times over the years, that if you don’t have the development in full swing the surfers will look at the extension as trash.

    If a surfer goes to 100 .dating sites and only 12 are developed (lets say developed out great), then that is 12 positive experiences and 88 negative experiences. Game over! Extension ruined!

    .com is a cesspool, and it is the best the entire world has been able to do . What makes anyone think another extension, besides ccTLDs and IDNs, will ever take off???

    There will be a lot of money to be made with these new extensions, but only by domainers and registrars. Both surfers and businesses will learn that running your site on one of these extensions will hurt both your site’s reputation and its business. You can’t fight a sea of scammers, half-hearted development, and non-existent sites in these extensions, and by default the new extensions image(s) will be permanently damaged.

    The only caveat I see is .xxx where there is enough money and reason to get the sites developed right. Outside this one, there will never be enough momentum to get the others going.

    Game over! .com wins!

  22. Michael H. Berkens says

    Muscle

    This is why there is a founders program for the last few new extensions including .xxx and will probably be one for every major extension from here on out.

    While some think the founders program is just a method to get premium dollar sales it really is a program to insure that the high valued domains are getting used and don’t go to a parked page or a non-resolving page.

  23. says

    @Muscle

    Good points. However.

    The point of the article is that many small businesses have said they would prefer to use a new extension like .shop – small businesses don’t buy domains and park them, they develop them. Parking is done by investors, many of whom have adamantly declared their intention to ‘stick with .com and ignore new tlds’. So, the ratio of developed to non developed domains in new gtlds will be LESS than it is in .com.

    Surfers come across domains while searching or type in. When did non developed domains start ranking higher than developed ones? Surfers are more likely to encounter domains with relevant content, not parked pages. Result – positive experience.

    Actually, you make a point that I have made, but with the opposite conclusion and that is in regard to type in traffic. New gtld haters often claim that everyone will just add ‘.com’ when typing in addresses. 1. Mr. Lawley states that at least 50% of their visits are from direct nav which means people aren’t doing that. And 2. If people are appending .com to everything then they will more often than not end up at an address they didn’t want – bad experience. Typo traffic to .com will diminish as people will just use search.

    Web developers in Germany, Netherlands and UK aren’t having a problem with professionality in .de, .nl or .co.uk – they are preferred over .com in those markets.

    Business models around many of the new gtlds are being developed that provide tools specifically for the market the tld is targeting. The .bank registry is putting together useful applications for .bank site developers. The .law registry will offer a bundle of services that specifically appeal to .law developers – etc. Many of the niche market tlds will do similarly – to encourage use.

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