Go Daddy 2015 Annual Report Download - page 70

Table of Contents
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.
65