TripAdvisor 2015 Annual Report Download - page 43

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2014 vs. 2013
Costofrevenueincreased$22millionduringtheyearendedDecember31,2014,respectively,whencomparedtothesameperiodsin2013,primarilydue
toincreaseddatacentercosts,drivenbyhighersitetraffic;increasedmerchantcreditcardandtransactionfees,drivenbyadditionaltransactioncostsfromour2014
businessacquisitionsandfree-to-listgrowthinourVacationRentalbusiness;andcustomersupportcosts.Intotal,ourAttractionandRestaurantbusinesses
contributed$6milliontoourcostofrevenuein2014,ofwhich$3millionrelatedtopersonnelandoverhead.
Selling and Marketing
Salesandmarketingexpensesprimarilyconsistofdirectcosts,includingSEMandotheronlinetrafficacquisitioncosts,syndicationcostsandaffiliate
programcommissions,brandadvertising,televisionandotherofflineadvertising,andpublicrelations.Inaddition,ourindirectsalesandmarketingexpense
consistsofpersonnelandoverheadexpenses,includingsalaries,commissions,benefits,stock-basedcompensationandbonusesforsales,salessupport,customer
supportandmarketingemployees.
Year ended December 31, % Change
2015 2014 2013 2015 vs 2014 2014 vs 2013
(in millions)
Directcosts  $ 514  $ 347  $ 243   48%  43%
Personnelandoverhead   178   155   125   15%  24%
Totalsellingandmarketing  $ 692  $ 502  $ 368   38%  36%
%ofrevenue   46.4%  40.3%   38.9%     
2015 vs. 2014
Directsellingandmarketingcostsincreased$167millionduringtheyearendedDecember31,2015whencomparedtothesameperiodin2014,primarily
duetoincreasedSEMcostsandotheronlinetrafficacquisitioncosts,increasedcostsrelatedtoourtelevisioncampaign,andincrementalcostsrelatedtoour2014
businessacquisitionsinAttractionsandRestaurants.DuringtheyearendedDecember31,2015,wespent$51milliononourtelevisionadvertising
campaign.Personnelandoverheadcostsincreased$23millionduringtheyearendedDecember31,2015whencomparedtothesameperiodin2014,primarily
duetoincrementalpersonnelcostsrelatedtoour2014businessacquisitionsinAttractionsandRestaurants.OurAttractionandRestaurantbusinessescontributed
anincremental$68milliontooursellingandmarketingexpensesfortheyearendedDecember31,2015,ofwhichanincremental$20millionwasrelatedto
personnelandoverhead.
2014 vs. 2013
Directsellingandmarketingcostsincreased$104millionduringtheyearendedDecember31,2014whencomparedtothesameperiodin2013,primarily
duetoincreasedSEMcosts,otheronlinetrafficacquisitioncosts,costsrelatedtoourtelevisioncampaign,inadditiontoincrementalcostsfromourrecentbusiness
acquisitions,partiallyoffsetbyadecreaseinspendinginsocialmediacostsandotherofflineadvertisingcosts,excludingtelevisionadvertising.Wespent$33
milliononourtelevisioncampaignduringtheyearendedDecember31,2014,whichwaslaunchedinMay2014.Personnelandoverheadcostsincreased$30
millionduringtheyearendedDecember31,2014whencomparedtothesameperiodin2013,primarilyduetoanincreaseinheadcounttosupportbusiness
growth,includinginternationalexpansionandemployeesjoiningusthroughrecentbusinessacquisitions,whichalsoincreasedstock-basedcompensationcosts.In
total,ourAttractionandRestaurantbusinessescontributed$25milliontooursellingandmarketingexpensein2014,ofwhich$8millionrelatedtopersonneland
overhead.
Technology and Content
Technologyandcontentexpensesconsistofpersonnelandoverheadexpenses,includingsalariesandbenefits,stock-basedcompensationandbonusesfor
salariedemployeesandcontractorsengagedinthedesign,development,testing,contentsupport,andmaintenanceofourwebsitesandmobileapps.Othercosts
includelicensing,maintenanceexpense,computersupplies,andtechnologyhardware.
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