Go Daddy 2015 Annual Report Download - page 154

Table of Contents
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increase in absolute dollars as we continue to enhance existing products, develop new products and geographically diversify our
data center footprint. Technology and development expenses may increase or decrease as a percentage of total revenue
depending on our level of investment in additional personnel and the expansion of our global infrastructure footprint. Our
investments in additional technology and development expenses are made to enhance our integrated technology infrastructure
and support our new and enhanced product offerings, international expansion and the overall growth of our business.
Year Ended December 31, 2015 to 2014 2014 to 2013
2015 2014 2013 $ change % change $ change % change
Technology and development $ 270.2 $ 250.8 $ 206.0 $ 19.4 8% $ 44.8 22%
2015 compared to 2014. Technology and development expenses increased $19.4 million, or 7.7%, from $250.8 million in
2014 to $270.2 million in 2015. The increase was primarily attributable to an $13.7 million increase in compensation-related
costs for our technology and development employees (including a $7.8 million increase in equity-based compensation), a
$2.7 million increase in data center rent related to the continued growth of our business and a $2.1 million increase in
technology-related professional fees to support our internal development team and expedite delivery of product enhancements
to our customers.
2014 compared to 2013. Technology and development expenses increased $44.8 million, or 21.7%, from $206.0 million
in 2013 to $250.8 million in 2014. The increase was primarily attributable to an $18.9 million increase in compensation costs
driven primarily by employee headcount increases during the second half of 2013, of which $6.4 million relates to our Media
Temple business acquired in the fourth quarter of 2013 and $5.7 million relates to an increase in equity-based compensation
expense. The remaining increase was primarily due to an $11.2 million increase in data center rent, of which $8.7 million
relates to our Media Temple business, and a $9.6 million increase in technology-related professional fees to support our internal
development team and expedite delivery of product enhancements to our customers.
Marketing and advertising
Marketing and advertising expense represent the costs associated with attracting and acquiring customers, primarily
consisting of fees paid to third parties for marketing and advertising campaigns across television and radio, search engines,
online display, social media and spokesperson and event sponsorships. These expenses also include personnel costs and affiliate
program commissions. We expect marketing and advertising expenses to fluctuate both in absolute dollars and as a percentage
of total revenue depending on the size and scope of our future campaigns, particularly related to the size and scope of our new
product introductions and the growth of our international operations.
Year Ended December 31, 2015 to 2014 2014 to 2013
2015 2014 2013 $ change % change $ change % change
Marketing and advertising $ 202.2 $ 164.7 $ 145.5 $ 37.5 23% $ 19.2 13%
2015 compared to 2014. Marketing and advertising expenses increased $37.5 million, or 22.8%, from $164.7 million in
2014 to $202.2 million in 2015. The increase was due to a $36.4 million increase in discretionary advertising spend driven by
our international expansion.
2014 compared to 2013. Marketing and advertising expenses increased $19.2 million, or 13.2%, from $145.5 million in
2013 to $164.7 million in 2014. The increase was primarily attributable to a $15.8 million increase in discretionary brand
development costs, of which $2.8 million is related to our Media Temple business, and a $3.4 million increase in compensation
costs primarily driven by a 4.2% increase in employee headcount and an additional $3.2 million of equity-based compensation
expense resulting from the modification of certain options.