|TRIVAGO N.V. filed this Form 6-K on 07/25/2018|
Our model for allocating our marketing spend, which we refer to as our attribution model, aims to optimize our investment mix going forward by focusing less on revenue generated in each user session and more on the end-to-end booking value of the user that we generate through our platform. The model focuses on whether a user who comes to us from a performance marketing channel proceeds to book a hotel. In the second quarter of 2018, we largely completed the roll out of our attribution model in our SEM channel. We plan to continue to incrementally improve our model for allocating marketing spend over the next quarters.
Reflecting this dynamic environment, we now expect adjusted EBITDA for 2018 to be between negative €15 and negative €30 million and total revenue to decline when compared with the twelve months ending December 31, 2017.
Changes to our Supervisory Board
On July 23, 2018, the Supervisory Board accepted the resignations of Mieke De Schlepper as member of our Supervisory Board and of Peter Kern as chairman of our Audit Committee. Mr. Kern will remain a member of our Supervisory Board. On the same day, our Supervisory Board designated Hiren Mankodi as temporary member of Supervisory Board and chairman of our Audit Committee. Mr. Mankodi’s designation is pending his appointment by our general meeting of shareholders next year. Upon his designation as temporary member of the Supervisory Board, Mr. Mankodi will have all powers and responsibilities of a Supervisory Board member, as if he had been appointed by the general meeting of shareholders.
We earn substantially all of our revenue when users of our websites and apps click on hotel offers in our search results and are referred to one of our advertisers. We call this our Referral Revenue. We also earn subscription fees for certain services we provide to advertisers, such as Hotel Manager Pro, although such subscription fees do not represent a significant portion of our revenue.
Referral Revenue, Other Revenue, Qualified Referrals & RPQR
Referral Revenue by Segment & Other Revenue (€ millions)
Management has identified three reportable segments, which correspond to our three operating segments: the Americas, Developed Europe and Rest of World. Our Americas segment is comprised of Argentina, Barbados, Brazil, Canada, Chile, Columbia, Costa Rica, Ecuador, Mexico, Montenegro, Panama, Peru, Puerto Rico, the United States and Uruguay. Our Developed Europe segment is comprised of Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Malta, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Our Rest of World segment is comprised of all other countries, the most significant by revenue of which are Australia, Japan, India, Turkey, Russia and New Zealand. We believe the different trends in Referral Revenue across our reportable segments is primarily related to the different stages of development of our markets. We generate the most Referral Revenue in Developed Europe, our segment that includes the markets where we have operated the longest and where we have the highest level of brand awareness, but have also historically experienced relatively modest growth and where our revenue declined in the second quarter of 2018 and the six months ended June 30, 2018. Our revenue levels are relatively more resilient in newer markets, and as a result, our Referral Revenue in RoW experienced lower declines in the second quarter of 2018 than those experienced in the other segments and increased slightly in the six months ended June 30, 2018 as compared to the same period in 2017.