Groupon 2013 Annual Report Download - page 60

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52
EMEA
EMEA segment gross profit decreased by $119.1 million to $570.1 million for the year ended December 31, 2013, as
compared to $689.2 million for the year ended December 31, 2012. The decrease in gross profit was comprised of a $68.8 million
decrease in the Local category, a $36.4 million decrease in the Goods category and a $13.9 million decrease in the Travel and
other category.
Rest of World
Rest of World segment gross profit decreased by $52.5 million to $218.6 million for the year ended December 31, 2013,
as compared to $271.0 million for the year ended December 31, 2012. The decrease in gross profit was comprised of a $24.2
million decrease in the Goods category, an $18.3 million decrease in the Local category and a $9.9 million decrease in the Travel
and other category. We expect that gross profit for our Rest of World segment will increase in future periods as a result of our
acquisition of Ticket Monster.
Marketing
For the years ended December 31, 2013 and 2012, marketing expense was $214.8 million and $336.9 million, respectively.
Marketing expense by segment as a percentage of segment revenue for the years ended December 31, 2013 and 2012 was as
follows:
Year Ended December 31,
2013
% of Segment
Revenue 2012
% of Segment
Revenue
(dollars in thousands)
North America................ $ 113,612 7.5% $ 105,914 9.1%
EMEA............................. 65,130 8.8% 156,476 19.4%
Rest of World.................. 36,082 11.7% 74,464 20.5%
Marketing ................. $ 214,824 8.3% $ 336,854 14.4%
We evaluate our marketing expense as a percentage of revenue because it gives us an indication of how well our marketing
spend is driving the volume of transactions. Marketing expense as a percentage of revenue for the year ended December 31, 2013
has decreased from the prior year, which we believe is due to efficiencies we have realized from building a subscriber base and
shifting the focus of our marketing spend to customer activation and mobile application downloads. Additionally, we continue to
enhance our technology and methods for optimizing marketing expenditures, which we believe has contributed to more efficient
marketing spending in recent periods.
Marketing expense by segment as a percentage of total marketing expense for the years ended December 31, 2013 and
2012 was as follows:
Year Ended December 31,
2013 % of total 2012 % of total
(dollars in thousands)
North America.................... $ 113,612 52.9% $ 105,914 31.4%
EMEA ................................ 65,130 30.3 156,476 46.5
Rest of World..................... 36,082 16.8 74,464 22.1
Marketing..................... $ 214,824 100.0% $ 336,854 100.0%
Our marketing expense decreased by $122.0 million to $214.8 million for the year ended December 31, 2013, as compared
to $336.9 million for the year ended December 31, 2012. As our markets have continued to develop throughout 2013, the focus
of our marketing spend has shifted from subscriber acquisition marketing to customer activation and mobile application downloads,
which has contributed to lower marketing expense during the year ended December 31, 2013, as compared to the prior year.
Additionally, we have enhanced our return on investment analyses for marketing expenditures, which we believe has resulted in
more efficient marketing spending in recent periods.
Our subscriber acquisition and customer activation marketing activities also include elements that are not presented as