Groupon 2015 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2015 Groupon annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 181

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181

52
in our Local category, a $17.9 million decrease in our Goods category and a $11.8 million decrease in our Travel category. The
unfavorable impact on gross profit from year-over-year changes in foreign exchange rates for the year ended December 31, 2015
was $77.1 million. Gross profit margins on direct revenue transactions in our Goods category were 15.7% for the year ended
December 31, 2015. This represents a year-over-year decrease from 17.6% for the year ended December 31, 2014.
Rest of World
Rest of World gross profit decreased by $38.5 million to $137.9 million for year ended December 31, 2015, as compared
to $176.4 million for the year ended December 31, 2014. The decrease in gross profit was comprised of a $33.2 million decrease
in our Local category, a $4.2 million decrease in our Goods category and a $1.1 million decrease in our Travel category. The
unfavorable impact on gross profit from year-over-year changes in foreign exchange rates for the year ended December 31, 2015
was $25.4 million.
Marketing
For the years ended December 31, 2015 and 2014, marketing expense was $254.3 million and $242.0 million, respectively.
Marketing expense by segment as a percentage of segment gross billings, as a percentage of segment revenue and as a percentage
of total marketing expense for the years ended December 31, 2015 and 2014 was as follows:
Year Ended December 31,
2015
% of
Segment
Gross
Billings
% of
Segment
Revenue % of Total
Marketing 2014
% of
Segment
Gross
Billings
% of
Segment
Revenue % of Total
Marketing
(dollars in thousands)
North America $ 160,878 4.3% 7.9% 63.3% $ 137,648 4.2% 7.5% 56.9%
EMEA 72,499 4.0 8.4 28.5 76,752 3.7 8.0 31.7
Rest of World 20,958 2.8 10.3 8.2 27,554 3.1 10.7 11.4
Total marketing $ 254,335 4.1 8.2 100.0% $ 241,954 3.9 8.0 100.0%
Marketing expense increased by $12.4 million to $254.3 million for the year ended December 31, 2015, as compared to
$242.0 million for the year ended December 31, 2014. Marketing expense as a percentage of gross billings and revenue of 4.1%
and 8.2%, respectively, for the year ended December 31, 2015, was consistent with 3.9% and 8.0%, respectively, for the year
ended December 31, 2014. The favorable impact on marketing from year-over-year changes in foreign exchange rates for the year
ended December 31, 2015 was $14.6 million.
North America
North America marketing expense increased by $23.2 million to $160.9 million for the year ended December 31, 2015,
as compared to $137.6 million for the year ended December 31, 2014. The increase in marketing expense was primarily attributable
to increased spending on online marketing channels, such as search engine marketing, display and mobile advertising and affiliate
programs that utilize third parties to promote our deals online, in connection with our initiatives to grow our active customer base
and increase awareness of our marketplace.