TripAdvisor 2013 Annual Report Download - page 50

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property, allowing the user to shop for the best price. Pricing is the effective CPC that online travel
agencies and hoteliers are willing to pay us for a hotel shopper lead. Revenue per hotel shopper
decreased 13% for the year ended December 31, 2013 in comparison to 2012, and decreased 8% for the
year ended December 31, 2012 in comparison to 2011, according to our log files.
In summary, our CPC revenue depends on the number of hotel shoppers that are interested in a property,
whether there is a commerce link available for that hotel shopper to click on for that property, whether there are
several commerce choices available for that property so the hotel shopper has the benefit of pricing and
availability from multiple sources and what our customers are willing to pay us for the lead.
Key Drivers of Display-Based Advertising Revenue
For the years ended December 31, 2013, 2012 and 2011, 13%, 12% and 13%, respectively, of our total
revenue came from our display-based advertising product. The key drivers of our display-based advertising
revenue include the growth in number of impressions, or the number of times an ad is displayed on our site, and
the cost per thousand impressions, or CPM. Our number of impressions sold increased 34% for the year ended
December 31, 2013 over 2012 and increased 6% for the year ended December 31, 2012 over 2011, while pricing
decreased 5% for the year ended December 31, 2013 over 2012 and increased 1% for the years ended
December 31, 2012 over 2011, according to our customer logs.
Key Growth Areas
We continue to invest in areas of potential growth, including our social, mobile and global initiatives as well
as our Business Listings and Vacation Rentals products.
Mobile. Mobile is an investment area that is geared towards creating a more complete user experience by
reinforcing the TripAdvisor brand when users are in-market. In the year ended December 31, 2013, we saw
strong mobile user uptake, as aggregate downloads of our TripAdvisor, City Guides, SeatGuru, Jetsetter and
GateGuru mobile apps reached 82 million downloads and average monthly unique visitors via smartphone and
tablet devices grew over 170% year-over-year from 32 million to 87 million, according to company logs. We
believe that travelers will increasingly use mobile devices, including smartphones and tablets, to conduct travel
research and planning.
Social. Our Wisdom of Friends initiative is a core component of our strategic growth plan. We believe that
having a strong social presence improves engagement on our sites and improves the sites’ “stickiness” amongst
the users. As a result, we continue to deepen our integration with Facebook. As of December 31, 2013, and
according to AppData, an independent application tracking traffic service, TripAdvisor has averaged over
36 million monthly Facebook users via its TripAdvisor Facebook application. We offer these Facebook users a
more personalized and social travel planning experience that enables travelers to engage with their own Facebook
friends’ reviews and opinions when planning their perfect trip on TripAdvisor.
Business Listings. Created in early 2010, our Business Listings product enables hotel and accommodation
owners to list pertinent property information on TripAdvisor, bringing them closer to potential customers and
thereby increasing direct bookings. In the year ended December 31, 2013, we grew our Business Listings
customer base over 38% to 69,000 subscribers, representing approximately 9% of our current hotel and
accommodation listings on TripAdvisor branded sites. We continue to expand our sales force and improve
features to grow our subscriber base.
Vacation Rentals. As of December 31, 2013, we had amassed an inventory of approximately 550,000
properties, up more than 80% during the year, across our TripAdvisor Vacation Rentals, U.S.-based FlipKey, and
European-based Holiday Lettings and Niumba. We offer individual property owners and property managers the
ability to list using a subscription-based fee structure or a free-to-list, commission-based option and we believe
our highly-engaged and motivated user community creates a competitive advantage for us in this market.
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