TripAdvisor 2015 Annual Report Download - page 7

 advertisingfromdestinationmarketingorganizations,casinos,resortsandattractions,aswellasadvertisersfromnon-travelcategories.Display-
basedadvertisingissoldpredominantlyonacostperthousandimpressions,orCPM,basis.FortheyearsendedDecember31,2015,2014and2013
,weearned$159million,or11%,$140million,or11%,and$119million,or13%,respectively,inrevenuefromdisplay-basedadvertising.
·Subscription-Based, Transaction-Based and Other Revenue .BusinessListingsisasubscription-basedadvertisingproductofferedtohotels,B&Bs
andotherspecialtylodgingproperties.Thisadvertisingproductissoldforaflatfeeandallowssubscriberstolist,foracontractedperiodoftime,a
websiteURL,emailaddressandphonenumberonourTripAdvisor-brandedwebsites,aswellastopostspecialoffersfortravelers.Inaddition,we
earnrevenuefrommakinghotelroomnightsavailableforbookingonourtransaction-basedsites,includingJetsetterandTingoforwhichwearethe
merchantofrecord,makingrentallistingsavailablethroughourvacationrentalsbusiness,sellingdestinationactivitiesprimarilythroughViator,and
providingaccesstoonlinerestaurantreservationsprimarilythroughLafourchette,orthefork.com;aswellasotherrevenueincludingcontent
licensingwiththirdpartysites.FortheyearsendedDecember31,2015,2014and2013weearned$377million,or25%,$236million,or19%,and
$130million,or14%,respectively,inrevenuefromsubscription-based,transaction-basedandotherrevenue.
Our Industry
Weoperateintheglobaltravelindustry,focusingexclusivelyononlinetravelactivityandtheonlineadvertisingmarket.
AccordingtoPhocuswright,globaltravelspendingisexpectedtobegreaterthan$1.3trillionin2016.Recenthistoricaltrendsshowthat,eachyear,an
increasingpercentageofglobaltravelspendinghasbeenconductedonlinethroughsupplierwebsitesandonlinetravelagencies.Webelievethatthistrendwill
continueasonlinepenetrationcontinuestogrow,asmoreconsumersgainbroadbandaccesstotheInternet,assmartphone,tabletsandothermobilecomputing
devicescontinuetoproliferate,andastravelactivityincreasesalongwithanexpandingmiddleclassincertaindevelopingcountrieslikeChinaandIndia.
WebelievethattheInternetwillcontinuetobecomeevenmoreintegraltothetravel-planningprocessduetoincreasingworldwideonlinepenetration,
particularlygiventhecapabilitiesthattheInternetprovidestravelers,includingtheabilitytorefinesearches,comparedestinations,viewreal-timepricing,complete
bookings,andaccessinformationwhilein-destination.
Moreadvertiserscontinuetoshifttheirspendingfromofflinetoonlinechannels,mirroringthetrendinconsumermediaconsumptiongenerally.Giventhe
sizeofthetravelmarket,webelievethattravelprovidersandtravelrelatedadvertisersare,andwillcontinuetobe,motivatedtodevotesignificantresourcesto
advertisetheirtravelproductsandservices.Inaddition,asmoreandmoretraveltransactionsareconductedonlinegenerally,webelievethatanincreasingamount
oftraveladvertisingspendingwillmigratefromtraditionalofflineadvertisingchannelstoonlineadvertisingopportunities.
Our Key Strengths
TripAdvisor-brandedsitesarecomprehensiveonlineresourcesforuser-generatedcontentondestinations,lodging,attractionsandrestaurantsthathelp
travelersplanandbooktheperfecttrip.Tohelpourusersplantheirtrip,wecurrentlyfeature320millionreviewsandopinionsonaccommodations,attractions,
andrestaurants,includingmorethan50millioncandidphotos,andhelpfulcontentrangingfromhotelroomtipstotravelguides.Weprovidereal-timepricingand
availabilitysearchfunctionalitythatcompareshundredsofpartnerwebsitessothatuserscanfindandbookthebestprices.Wealsoenableuserstobookactivities
andattractionsandrestaurantreservationsonoursite.Ourtoolsandtravelcontentareavailabletousersaroundtheworldin28differentlanguagesaswellason
web-basedandmobileapplicationsonmobiledevicesandondesktops.
Inordertoachieveourgoal,weleverageourkeyassets—arobusttravelcommunity,richuser-generatedcontent,continuoustechnologicalinnovationand
globalreach—asfollows:
·Robust Travel Community .Webelievethatwehavethelargestbreadthofcontentinourmarketsandthat,becauseofthisbreadth,travelers
gravitatetoourwebsitestoresearchandplantheirtrips.Byprovidinganinteractiveforumtosharetheirexperiences,ourlargeandhighlyengaged
communityoftravelersisavaluableresource.Tofacilitateplanning,weenableconsumerstoresearchpricingandavailabilityfromthird-partytravel
bookingsites.Toencouragebettertravelexperiencesforconsumersandtocreateafeedbackloopbetweenthehospitalityindustryandindividual
travelers,weallowhospitalitymanagementrepresentativestorespondtoreviewsoftheirpropertiesonourwebsite.Aftercompletingtheirtrip,
consumerscanreturntoourwebsitestowritereviewstogivebacktothecommunitythathelpedthemplantheirtrip.Throughthiscycle,more
contentisgenerated,whichdrivescommunity,traffic,loyaltyandhighersearchenginerankings,allofwhichleadtofurthercontentcreation.We
believethatthevolumeofreviewsgeneratedonourwebsitesandtherobustfeedbackloopcreatedonourwebsitesprovidesuswithasignificant
advantageoverourcompetitors.
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