|TRIVAGO N.V. filed this Form 6-K on 02/06/2019|
profitability, they also reduced traffic to our platform attributable to all marketing channels and resulted in a decline in Qualified Referrals.
As we optimized our Advertising Spend and continued to implement measures aimed at optimizing our platforms and product (as further described below), we were able to improve the quality of the traffic that we referred to our advertisers in Developed Europe and slightly in Rest of World (or "RoW"), which was evident in the development of Revenue per Qualified Referral ("RPQR") in these segments in the fourth quarter of 2018. Reflecting this, we saw positive signs that our largest advertisers reacted positively to the improved quality of traffic that we referred to them by increasing their average CPC bids on our platform. At the same time, we believe our largest advertisers maintained their increased return on investment targets for their spend on our marketplace compared to the same period in 2017, while the volatility on our marketplace was relatively muted compared to that period, when some of our largest advertisers had conducted significant testing activities.
In the fourth quarter of 2018, we continued to implement measures aimed at optimizing our platforms and product, with the intention of increasing user retention and booking conversion, while reducing the number of click-outs required to ultimately make a booking. We believe these relatively small, incremental changes to our product have resulted, when considered together, in improvements to our product and platforms that continue to positively impact our advertisers' CPC bids on our marketplace. Since we make these changes by optimizing for traffic quality instead of volume, these changes will tend to have a negative impact on Qualified Referrals (in addition to the effect of declining Advertising Spend), but we believe they have had a positive impact on RPQR.
In the fourth quarter of 2018, we experienced negative impacts on our Referral Revenue and RPQR due to relative weakening of certain local currencies in Latin Americas to the euro. In the twelve months ended December 31, 2018, we experienced negative impacts on our Referral Revenue and RPQR from foreign exchange rate effects, in particular due to the relative weakening of the U.S. dollar and certain currencies in Latin Americas to the euro. (The average exchange rate of U.S. dollars to euro increased (4.4)% in the twelve months ended December 31, 2018, as compared to the same period in 2017, calculated using the average for the particular period of the daily foreign exchange reference rates published by the European Central Bank.)
Reflecting our performance in the fourth quarter of 2018, we expect Adjusted EBITDA for 2019 to be between €50 million and €75 million, and we expect Total Revenue to decrease in the first half of 2019 and increase in the second half of 2019 compared to same periods in 2018.
We earn substantially all of our revenue when users of our websites and apps click on hotel offers or advertisements 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, Brazil, Canada, Chile, Columbia, Ecuador, Mexico, Peru, the United States and Uruguay. Our Developed Europe segment is comprised of Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, 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, New Zealand, Russia and Turkey. We believe the different trends in Referral Revenue across our