Overstock.com 2012 Annual Report Download - page 55
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Table of Contents
We advertise through a number of targeted online marketing channels, such as sponsored search, affiliate marketing, portal advertising, e-mail
campaigns, and other initiatives. We also use nationwide television, print and radio advertising campaigns to promote sales.
The following table reflects our sales and marketing expenses for the years ended December 31, 2012 and 2011 (in thousands):
Sales and marketing expenses as a percentage of revenue decreased slightly for the year ended December 31, 2012, when compared to the same
period in 2011.
Sales and marketing expenses include stock-based compensation expense of $318,000 and $377,000 for the years ended December 31, 2012 and
2011, respectively.
Costs associated with our discounted shipping and other promotions, such as coupons, are not included in marketing expense. Rather they are
accounted for as a reduction of revenue and therefore affect sales and gross margin. We consider discounted shipping and other promotions, such as our
new policy of free shipping on orders over $50 introduced in early January 2013, as an effective marketing tool, and intend to continue to offer them as
we deem appropriate as part of our overall marketing plan.
We seek to invest efficiently in technology, including web services, customer support solutions and website search, and in expansion of new and
existing product categories, and in investments in technology to enhance the customer experience, improve our process efficiency and support our
logistics infrastructure.
The following table reflects our technology expenses for the years ended December 31, 2012 and 2011 (in thousands):
The decrease for the year ended December 31, 2012 is primarily due to decreases in compensation and recruiting-related costs primarily from
lower headcount earlier in the year; partially offset by an increase in third party technology services. Technology expenses in Q4 2012 increased by
$2.2 million compared to Q4 2011 largely due to investments made in new personnel and third party technology services.
Technology expenses include stock-based compensation expense of $799,000 and $628,000 for the years ended December 31, 2012 and 2011,
respectively.
46
Sales and marketing expenses $ 63,467 $ 61,813 $ 1,654 2.7%
Sales and marketing expenses as a percent of net revenues 5.8% 5.9%
Technology expenses $ 65,467 $ 67,043 $ (1,576) (2.4)%
Technology expenses as a percent of net revenues 6.0% 6.4%