|TRIVAGO N.V. filed this Form 6-K on 02/06/2019|
Other Revenue slightly increased by 2% to €4.4 million in the fourth quarter and remained stable at €15.0 million in the twelve months ended December 31, 2018 compared to the same period in 2017 due to the deconsolidation of myhotelshop in December 2017, that was partly offset by the increase in our subscription revenue and other royalties.
Qualified Referrals by Segment (in millions)
Note: Some figures may not add due to rounding.
Qualified Referrals in the fourth quarter of 2018 decreased in all segments compared to the same period in 2017 due to reductions in our Advertising Spend in the fourth quarter of 2018. All segments reflected the negative impacts of reduced click-out rates due to the completed roll-out of the attribution model and ongoing product optimizations. The declines in Americas and Developed Europe were primarily due to a reduction in our brand marketing spend and an increase in the profitability targets in our performance marketing campaigns. The decline in RoW was driven by increasing profitability targets in our performance marketing campaigns while the decline in branded marketing spend in that segment had only a slight impact on Qualified Referrals.
Qualified Referrals in the twelve months ended December 31, 2018 decreased in Americas and Developed Europe while they increased in RoW compared to the same period in 2017. The declines in Americas and Developed Europe were primarily due to a reduction in our Advertising Spend that began in the second quarter of 2018, which was partly offset by the positive growth in Qualified Referrals in the first quarter of 2018. The slight increase in RoW was driven by a strong increase of Qualified Referrals in the first quarter of 2018 reflecting increased Advertising Spend, which was partly offset by the negative impact from the reduction of Advertising Spend since the second quarter of 2018. All segments reflected the impact on click-out rates from the attribution model and product optimizations noted above.
Revenue Per Qualified Referrals (RPQR)
We use RPQR to measure how effectively we convert Qualified Referrals to revenue. RPQR is calculated as Referral Revenue divided by the total number of Qualified Referrals in a given period. Alternatively, RPQR can be separated into its price and volume components and calculated as follows:
RPQR = RPR x click-out rate
RPR = revenue per referral
click-out rate = referrals / Qualified Referrals
RPQR is a key financial metric that describes the quality of our referrals, the efficiency of our marketplace and, as a consequence, how effectively we monetize the referrals we provide our advertisers. Furthermore, we use RPQR to help us detect and analyze changes in market dynamics.