Groupon 2012 Annual Report Download - page 51

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Marketing expense by segment as a percentage of total marketing expense for each of the periods was as
follows:
Year Ended December 31,
2012 % of total 2011 % of total 2010 % of total
(dollars in thousands)
North America ........................ $105,914 31.4% $254,746 33.1% $123,590 42.5%
International ......................... 230,940 68.6% 513,726 66.9% 166,979 57.5%
Marketing ....................... $336,854 100.0% $768,472 100.0% $290,569 100.0%
2012 compared to 2011
Our marketing expense decreased by $431.6 million to $336.9 million for the year ended December 31,
2012, as compared to $768.5 million for the year ended December 31, 2011. For the year ended December 31,
2011, customer acquisition still comprised the primary portion of our marketing spend, particularly in our
international markets as we were still in the early phases of building our customer base in those markets. As our
markets have developed over the last twelve months, we have begun to shift our marketing spend from customer
acquisition marketing to activation, which has contributed to lower marketing expense during 2012.
North America
North America segment marketing expense decreased by $148.8 million to $105.9 million for the year
ended December 31, 2012, as compared to $254.7 million for the year ended December 31, 2011. For the year
ended December 31, 2012, marketing expense as a percentage of revenue for the North America segment was
9.1%, as compared to 40.1% for the year ended December 31, 2011. The decreases were primarily attributable to
a decrease in online marketing spend. This reflects the continued shift in focus from customer acquisition
marketing to activation, which has contributed to lower marketing expense during 2012.
International
International segment marketing expense decreased by $282.8 million to $230.9 million for the year ended
December 31, 2012, as compared to $513.7 million for the year ended December 31, 2011. For the year ended
December 31, 2012, marketing expense as a percentage of revenue for the International segment was 19.8%, as
compared to 52.7% for the year ended December 31, 2011. The decreases were primarily attributable to a
decrease in online marketing spend. This reflects the continued execution against our plan to move from
customer acquisition marketing to activation, which has contributed to lower marketing expense in 2012.
2011 compared to 2010
Our marketing expense increased by $477.9 million to $768.5 million for the year ended December 31,
2011, as compared to $290.6 million for the year ended December 31, 2010. Marketing expense increased as we
continued to focus on customer acquisition. For the year ended December 31, 2011, customer acquisition costs
still represented the primary portion of our marketing spend. Through the course of the year an increasing portion
of marketing was incurred for customer activation, which includes conversion of subscribers that were not
previously paying customers, as well as customer acquisitions outside of our email subscriber base.
North America
North America segment marketing expense increased by $131.2 million to $254.7 million for the year ended
December 31, 2011, as compared to $123.6 million for the year ended December 31, 2010. For the year ended
December 31, 2011, marketing expense as a percentage of revenue for the North America segment was 40.1%, as
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