How to ensure your domain name portfolio supports your business goals

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Web domains are something the ordinary consumer does not think about too much – they are there, and are used to find what you want on the internet. Yet, according to Verisign’s Domain Name Industry Brief, “the third quarter of 2022 closed with 349.9 million domain name registrations” – that’s more than 1 domain for every 22 people on the planet. It won’t come as a surprise to learn that .com trumps them all as the same report showed there are over 174 million .com and .net domain registrations.

While domains are not a common source of concern for the everyday consumer, they are the backbone of the internet – and their usage depends on how they are bought, sold, managed and controlled, depending on a business’ goals.

Registering corporate domain names in every possible domain space, variation and spelling is a costly process. The expense is compounded by the combination of rising .com prices and an uncertain economic outlook. Rising interest rates, supply chain issues and the continued fall out from Brexit means UK businesses are facing significant financial headwinds in the year ahead. Many will be consolidating on speculative projects and doubling down on core business goals.

Despite this, internet domains are among an organisation’s most important digital assets – the IP of a business is now viewed as critical to the intrinsic value of the business itself, supporting income streams and global marketing campaigns. The loss of their control could be severely damaging, both in terms of revenue and reputation. As such, many leaders see digital assets as an area to maintain investment in, despite the financial challenges.

To maintain investment whilst controlling cost, businesses need to be auditing their portfolios with return on investment (ROI) aligned to their goals.

Understanding your portfolio

The first stage of ensuring your domain portfolio is aligned to your business goals is understanding the purpose of each and every domain registered. The portfolio owner should be aware of what domains are registered, which business or division is accountable for each domain, how they are used, the DNS traffic they attract and the rate of portfolio growth. Only then can you distinguish their purpose – for traffic, brand awareness or defensive reasons – so informed consolidation decisions can be made.

Calculating the “full life” cost of each domain can help a business understand how costly that domain is against what value its provides. This should include purchase or recovery costs, registrar fees, registry and other third-party fees for the entire lifetime of the domain.

Going through this process will allow businesses to consider the health of their portfolio and reflect on whether it has grown to excess. With consolidation weighing heavily on many businesses, auditing the domain portfolio can be an easy way to cut cost in unnecessary investment. If the domain no longer supports a core business activity or key infrastructure, it can be lapsed when renewal is due.

The auditing process can also be very revealing in terms of measuring the security risk of each domain. The imposing risks around the portfolio should be identified, recorded and mitigated – providing further intelligence on which domains justify their ongoing protection.

Measuring the ROI

Every domain should have a clear purpose and justify itself in terms of ROI. Every domain should earn its keep, either by driving traffic, supporting functionality or by protecting brand reputation. Assessing domain names from this perspective will let companies ‘rightsize’ their portfolios and inform future registration strategies, by focusing budgets on core brands and domains.

But with so many different types of TLDs out there, the different costs associated with each, the challenge of maintaining oversight of their domain and trademark portfolios requires a strategic approach. The portfolio should be structured for optimal ROI which takes into account what the business wants to achieve.

As businesses look to double down on measuring the ROI of all aspects of the business, leaning on registrars to manage the health of a domain portfolio can be hugely valuable.  Domain management providers can help businesses make these savings and align security investments with the purpose and importance of each domain in the portfolio. In addition, consolidating domains, DNS and SSL certificates so they are managed together, can reduce overhead costs and mitigate risk at the same time.

Establishing a strategy that supports your business goals

 Almost every organisation will say they have too many domains and in many cases, they are right. While it is essential that businesses understand the ROI associated with each domain, it is equally important that they do not lose sight of the vision and strategy of the organisation.

For instance, brands are increasingly considering whether they should establish their online presence in Web3. User numbers are growing, and the Metaverse market is predicted to reach $800bn by 2024, providing a potentially lucrative new market to businesses.

Being one step ahead of cyber criminals will mean that the portfolio is audited with these kind of future business opportunities in mind. Many brands are already registering their domains in Web3 – some purely defensively – to future-proof the business for what could be the next stage of the commercial internet.

That said, challenging economic times dictate that any new investments are scrutinised and carefully considered, making good use of the domain assets already deployed by a business while being cautious about new investment. Not compromising on DNS resilience or domain security for key domains is essential to preserve brand reputation – while acting in the best interests of the business and its consumers.

The creation of a strategic approach for the management of these key digital assets is now seen as a measure of good governance. But in times of economic uncertainty, ROI is a key business metric. The goals of the business should be reflected in the size and composition of the portfolio, and reviewed regularly for alignment with strategy.