Q2 2023 Trivago NV Earnings Call
Good day, ladies and gentlemen, thank.
Keep your standing by and welcome to the Trafalgar Q2 earnings call 2023.
Must advise you the call is being recorded today Wednesday, the second of August 20th century.
Pleased to be joined on the call today by Johannes Thomas <unk>, CEO , and managing director Imitates Tobin Schilke, our CFO and managing director.
The following discussion including responses to your questions reflects management's views as of today Wednesday, the second of August 20th century.
Two bulker does not undertake any obligation to update or revise this information as always some of the statements made on state code are forward looking typically preceded by words, such as we expect we believe we anticipate or similar statements.
Please refer to the Q2 2023 operating and financial review and the company's other filings with the SEC information about factors, which could cause actual results to differ materially from these forward looking statements.
You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in Chicago is operating I'm finance with you, which is posted on the company's IR website at IR Deutsche Bank I don't call them. You are encourage to periodic features that you all guys Investor relations site for important content finally.
Otherwise stated all comparisons on this call will be against results for the comparable period of 2022.
With that let me turn the call it two Johanna.
Okay.
Good morning, everyone and thank you for joining our Q2 2023 earnings call.
As this is my first call since returning to the company I wanted to take this opportunity to share some of my initial observations and thoughts on our strategic direction.
Firstly I'm thrilled to be back in Chicago, and equally excited to be joined by our new Chief marketing Officer Jasmine.
Chief product Officer Andre.
I'm also excited to team up with <unk> again.
We have been part of the leadership team, but scared Chicago across the growth.
With our deep understanding of the company and the relevant Knowhow in marketing product and technology, we feel confident to guide the company's future.
Our first first months have confirmed our belief in the potential of the business and the capabilities of our teams.
We have a massive brand and a massive industry.
Travel is one of our biggest sectors and it has proven its robustness.
The hotel segment is very attractive and highly fragmented.
As a meta search we bring clarity to complexity we.
We have great content reviews on rates for more than 5 million properties from hundreds of turbo sides.
Most importantly, we deliver a strong value proposition on price the factor of travelers care about when considering a website to search of polka hotel.
Our strategic focus remains on hotel in accommodations.
This focus on one vertical and enabled tomorrow to VAALCO has tremendous growth in the past and carries considerable advantages for the future.
It allows us to position our brands uniquely as the mental go to place for searching hotels.
The claim hotel Chicago speak for itself and is well known across the globe and.
In many large markets we are still among the most recognized travel brands and every year millions of travelers to start the search on Chicago.
With a product that is focused on hotels, we can deliver a search experience that surpasses, all others and simplicity and seamlessness.
We understand the optical our business has faced in the wake of the pandemic keeping.
Keeping to value at the forefront of travelers' minds through brand marketing has been a steeper challenge in the past few years.
Simultaneously <unk> cautiously cut back on marketing spend and a push for higher profitability.
We have rejoined survival with a firm belief that we can return the business to a growth path.
As the new management team all core responsibility lies in striking an optimal balance between growth and profitability.
Aiming to maximize long term shareholder value.
To realize this we will continue investing until a brand presence.
Television remains an essential part of our marketing efforts due to its vast reach and effectiveness.
We have already adjusted our media buying techniques doing our nature months and continue to optimize our media channel and market mix.
We have also become more experimental now TV advertisement to understand how we can improve direct response and activate more travelers when they see all right.
Beyond brand, we see plenty of opportunity to enhance our core products with a goal to further improve user experience and retention.
We want to provide everything travelers' need to constantly search compare and choose the ideal hotel, we been lifting price when it comes to loyalty, we will cement our position as a shortcut to find the best rates and where <unk> really reinforce our capabilities as a deal finding platform.
Yet yet the foundation of our ambitions is our people and the culture, we foster our.
Our success has always leaned on the commitment and creativity of our team members.
Broadly turn the ideas into reality.
We will revitalize our culture of micro innovation continuous improvement and disciplined execution.
It will make us take better decision loon faster.
More value for our users and advertising partners.
We're excited for what's ahead now committed to leveraging our experience our brand strength and our value proposition to move <unk> forward.
With this I'm handing over to Matthias.
Thanks, Ron and welcome to your first earnings call with Us.
Morning, and good afternoon to everyone on the call. This was the.
For the second quarter proved to be challenging for us with our referral revenue decline of 13% year over year.
While last year's Q2 results were positively impacted by pent up travel demand driven by travel Lockdowns and restrictions in the first quarter of 2022 in particular in Europe , and Asia, we observed a normalization in seasonality this quarter.
Last year, we also experienced higher monetization levels in our auction and our advertising partners and for growth during the reopening.
In the first half of this year the seasonal pattern in bidding dynamics in our auction normalized which led to lower levels of monetization and year over year.
In addition, we observed that Google rolled out a sponsored AD format in the search engine results pages mid may and we believe that this initially captured a significant impression share from traditional airports.
The combination of a normalization in seasonality lower levels of monetization and Google that changes had a negative impact on our performance marketing volumes as.
As a result, the year over year referral revenue decline in the second quarter was higher than we anticipated at the beginning of May.
We continue to execute on our plan to ramp up brand marketing investments as we see positive results from our brand campaigns.
We believe it will help us to rebuild our brand baseline terrific long term, even though the investments lead to lower levels of return on advertising spend in the short term.
Our consolidated Ross declined to 144, 6% in the second quarter down from 165, 9% in the same period last year.
Yes.
Our net income was $5 8 million euro compared to a net loss of $59 8 million last year the.
The increase was mainly driven by an impairment of intangible asset and goodwill of 80.
$4 2 million recorded in 2022.
The increase in brand marketing expenses and lower levels of monetization led to a decrease in our adjusted EBITDA to $12 2 million in the second quarter of 2023 compared to $30 3 million Euro in the same period in 2022.
Let me give you some color on the dynamics in the second quarter for the different regions.
Starting with our segment Americas or deferred revenue declined by 23% year over year.
The decline was largely driven by a loss in performance marketing volumes as we did not observe the same uptick in.
And monetization our own auction as last year and Google at changes that I mentioned before which led to a reduction in impressions and ultimately terrific for us.
Average booking values were roughly stable year over year as the tailwind from higher ADR was offset by a decrease in length of stay and negative foreign exchange effects.
In developed Europe , the year over year referral revenue decline was less pronounced than in America is the headwind from lower levels of monetization was partly offset by an increase in booking conversion.
ADR increased year over year by mid to high single digit however that the increase was offset by similar decline in length of stay.
As a result, our average booking value was roughly flat compared to the same period in 2022.
We saw revenue in our segment rest of world increased by 21% year over year as the recovery in many Asian markets continue most notably in Japan and Hong Kong.
While overall length of stay was also shorter in rest of world compared to the same period. In 2022. This was more than offset by an increase in <unk> of over 20%.
In addition, we saw an increase in booking conversion as many Asian countries continued to recover post COVID-19.
Foreign exchange rates had a negative impact of around 10% in that segment for us.
Moving on to our operational expenses, excluding advertising expenses and the impairment of intangible assets and goodwill from last year, we saw a decline of 11% and our operational expenses in the second quarter compared to the same period in 2022.
Compensation expenses, including share based compensation decreased mainly as a result of headcount reductions compared to the second quarter in 2022.
Further we recorded lower commission fees for acquiring traffic as our white label product is fading out.
We remain well capitalized was approximately 298 million.
And cash cash equivalents restricted cash and short term investments and we continue to be debt free.
Let me close with an outlook on the third quarter.
Cause I should headwinds, we plan to invest into Brent marketing at similar levels to last year in the third quarter, and therefore expect a decrease in Ross and contribution to compared to the same period last year.
For the full year 2023, we continue to expect to exceed all 2019, adjusted EBITDA of 70 million Euro.
With that let's open the line for questions.
<unk> <unk>, Oh, Q and a session. If you would like to ask a question. Please press one on your telephone keypad. If you change your mind and would you like to write your question. Please cresta spell it by today.
Trying to ask you a question. Please ensure that your device on me to like.
Our first question comes from <unk> from P. Raleigh now that your line is now like him to proceed.
Thanks and.
Congrats dramas on on your return.
Just a couple of questions. So maybe one on the Google or changes that you saw what are the extent of that.
Mostly in the U S are you, saying that first of all <unk>.
Then secondly.
Spoke about.
May be increased focus on brown it okay, I think I'm just trying to figure it out.
Where's the line that you would expect there in terms of that translating into better performance in the core business.
Yeah thinking of it.
On your first question it was really across all <unk>. So it's not U S specific but it includes the U S. So we obviously, it's always a bit different market by market and they.
They have different dynamics, it's not only the role of a rollout of Viet, but also how competitors react.
Participate in that format and all the normal dynamic as in at work and so that can be slight differences market by market, but it's not that we hope deserved.
That this was rolled out in 101 market and not in others is was really global.
And then on Glenn advertisement.
I think I'll.
General philosophy has not changed and honest can connect to this and share his thoughts but.
We already said last year that we believe.
Brand marketing investment into brand has been a.
Key secret sauce for the company for many many years and that's how we build a global brand in many countries and obviously it was difficult.
To run that playbook through the pandemic.
And in particular, when we saw first countries and regions recovering it was difficult to navigate because television.
<unk> today and brand.
Is really a mosque, China and you cannot selectively target certain audiences and that's why in the ramp up some of the recovery it can be quite expensive to advertise style.
And that's what we try to balance over.
The last couple of years in particular in 2020, and 21, and then last year, we started to ramp up.
As you.
Truly recall, the first quarter of us through difficult in particular in Europe and.
Rest of World.
And that's why we in hindsight, probably were a bit too cautious going into the summer period.
And that's what we set.
What we want to change this year and that's why we started earlier to invest into brand and that's what you can probably see in the numbers as well.
With a robust decline as we have started to advertise earlier than last year in into Brent.
Having said that and that's my last comment.
Obviously everything we do in brand is.
Has a long term impact so we don't into.
Have a positive return on investment in the short term. So it comes as negative contribution and we I mean from the <unk>, we had pre Covid and also when we ramped up last year.
We know that it takes a bit longer to see the positive effect on the brand baseline.
Then on revenue contribution, but we are convinced that.
We would see those effects in the future and that's why we keep investing.
Okay, a quick follow up.
So you're prepared remarks talk about an improvement in locating conversion.
And I'm curious what drove that.
Yeah. So it's.
I mentioned that we saw an improvement in Brooklyn conversion in Europe , and wrestles words, starting with the rest of World I think that is primarily driven by the recovery.
In Europe .
It can be a mixed effect.
For example.
China mix effect.
I can which makes sense if you.
If you combine that with the other commentary we made.
Because we lost performance traffic volume and brand conversion tend to be higher so there's nothing to call out in terms of significant changes we did on the product side uhm as.
As your honours mentioned in his remarks.
The philosophy is more.
Two.
And invest into into the product and try to improve it <unk>.
Incrementally so.
By building.
Smaller features and continuous improvement, but it's not that we.
We aimed for this one big change that.
Gives you a step change in the Congress, which is difficult to achieve to start with so I think it's more Muslim a mix.
Mix and maybe country mix a side as well then any bigger changes on the process.
Got it.
Thank you it is.
Okay. Thanks.
Thank you next question comes from Jane Nathan Me to like change. Your line information. Please go ahead with your question.
Great. Thanks for taking my questions Congratulations yohan for coming back to Chicago basically two questions. Here I was wondering can <unk> give us shield longterm view about the metasearch, giving.
Giving to continue Google headwind, we're seeing here and also can you talk about this strategy for the company going forward how is that different <unk>. Thank you so much.
Yeah, if I if I look at if I look at this space I think most important when I look at it as.
Are we solving a problem is there an added value that we're creating and I think that that's what I outlined we see that there are still a very strong price disparity, there's a lot of different advertisers with different prices. So there is a reason to exist as a matter of such and we simplify the word for use us and that's why they're.
Coming to us and this has not changed in our research in and the feedback we are collecting from users. They're certainly a segment that goes for convenience regular travelers that that certainly have a good reason.
Not to use a matter such and but overall M. I think the proposition is as strong as it always was and then it's a question do you get this across to they use us at spending much less in marketing now we need to be smarter and more efficient to do that.
And I think that's a differentiation to Google <unk>.
Cannot capture that the mental space that they are about hotels that search engine much broader yes stop there but EM.
I think with our brand marketing.
<unk> that's always been.
<unk>, a starting point and you check in with Trivago. When you are in your research and planning phase and this fundamentally doesn't change and and I think it's been up to us to rebuild a better product too I believe we have a better product, yes, and we.
We need to continue to innovate and improve our core product and that's why I believe last year and coming to your strategy question last year. This shift has gone back to core product and that is what I would sign 100 per cent I think the market is huge the brand is very strong capturing.
Capturing space in that market at our size should be very reasonable and and that is what what excites us to be here and fundamentally it's about rebuilding our brand and being efficient and marketing and converting them into our product.
Okay.
If I can.
Yeah.
You had a second question.
Yeah go ahead please.
Yeah, you got a second question or.
And the second question did it for <unk>, you know Yohan <unk>.
Go ahead and finish your commentary about strategy that'd be great.
No I think that was my my points on strategy and how I look at the space.
Big market Big brands, and the product that solves the problem.
Awesome awesome and from the T. S. A couple of housekeeping question here I think on the press release you said.
Length of stay it's little bit shorter continued to be shorter I was wondering can you guys give us more color last quarter, you said it was down low single digits.
And also you say you continue seeing trade down and can you give us a little bit more color is across the board using all region or in specific regions are you seeing a little bit more trade out activities.
<unk>.
Yeah sure. Thanks James.
So first of all.
We see a reduction in the nasal spray across all regions.
Last quarter, we said, it's low single digit it's.
<unk> higher than that.
Now and I think that makes sense given that.
Approaching the summer season, with an average length of stay that is longer.
It makes sense that the decrease.
Is increasing as long as it's very similar to what we saw last year in the third quarter already in Europe .
And I mean to.
To give you an idea when it was low single digit in the first quarter than it is now high single digit kind of him.
And it's.
Very very similar in the different regions Elizabeth Lola and wrestled word, but then you need to be careful with giving me.
That there are lots of mixed effects in that segment that segment consists of 30 market swath.
There's also.
Some noise in the year over year comparisons S last year, we didn't see all market slowly recovering now, it's a bit different which which leads to.
Country.
Shift this year as well.
But all the same story in similar trends.
What is different than the rest of the world and a call that artist that the <unk> and the year over year comparison, increasing stronger and what he should also reflect is that they're in the numbers. We report in euros negative currency effects and that is a bit bigger in rest of was.
I think I mentioned, the number was a headwind of around 10% loss in America. There was also in currency effect of around 5%.
Europe .
Not so much it's only the pumps sterling, but there wasn't as big.
In terms of trading down it's really length of stay is the one that stands out in and where we see an impact that is quantifiable.
It's it's not that we see a significant shift in such behavior or try the behavior that I would call out.
Okay, great. Thank you so much.
Thank you.
Thank you next question comes from <unk> J C from city furniture line <unk> go ahead.
Great. Thanks for taking my question I I've I've got a few please just it will start with a Google changes into a quarter I think he said the impacts are mostly in may but July we did see some increases in referral revenues.
You're honest with you. So can you just help us understand a little bit more on where we are recovering from these pupil changes from from back in May and sort of how you feel going forward I wasn't quite clear and then M. A T. S. You know the cash balance continues to be pretty strong and you just talk to me you will talk to us a little bit more.
More about your plans with which of August cash overall, thank you.
Yep. Thank you Ron.
Let me, let me try to clarify.
The cadence of revenue maybe in the quarter and what we saw in July and leave that to the Google that changes as well.
So if I start with the with our refer revenue development on a global level.
We said last time that I'll refer revenue declined by low single digit in April and then for the second quarter, we reported a decline of 13%. So may and June was down more than the 30%.
In July the decline improved from June to be more in line with a declining so for the second quarter. Overall. So that gives you an idea roughly of improvement in July versus June and I think it's a combination of factors that let.
Two first higher than expected year over year declines in May and June .
I called them out just to summarize again.
Normalization seasonality and travel demand and all levels of monetization.
I guess, that's clear lastly, we saw strong pent up demand going into summer in El advertising partners leaned in so we observed strong option dynamics as well and both are leading to difficult comes now and now.
Now that we see a normalization seasonality.
And then the other one is the.
Google and it changes that we started to observe may.
Again, it's a bit harder to quantify that given.
Everything that's going on and.
That it always depends on bidding the limits by by other partners as well.
But I think what's important to take away your forces that in July some of these sectors improved and as a result, we saw an improvement.
<unk> performance marketing volumes.
So.
I think that gives you an idea of the level of improvement in July was June and again, it's driven by a slight improvement in monetization, which is still down year over year.
And also by.
The Google dynamics as we saw that we kept it more more volumes again.
Does that answer your question on on the revenue cadence.
Yes that that makes sense in any anti itch on on the use of cash or just plans for capital.
Yeah sure. So I think we acknowledged.
<unk> acknowledged that in the past that our current capital structure is not optimal.
We have quite some cash on the balance sheet. It gives us some flexibility though.
And the new management team just started a few months ago and they will also <unk> an organic growth options, though that is not the primary focus for us right now.
But what that means is that we are not in a rush, but we continue to look at ways to optimize all capital structure and uhm might do something.
In the next couple of months.
Thank you very much guys.
Thank you.
Thank you next question comes from the <unk> from the G. P S.
<unk>.
Yeah, great. Thanks.
So.
Last four of you guys commented on customers, increasing row asked threshold targets.
You've talked about commercialization being a little bit weaker.
Can you can you just help us bridges some of this customer's still looking for higher row as marginally like what other feedback are you hearing.
Some of your big bigger customers on on on that side.
So yeah, I mean, we call it out M as in normalization and I I think that is what I would also an.
Answer here that we think could levels and.
And we don't have any signals that this would be changing I think overall, it's important to stay relevant to build a brand. So we deliver right value our customers to them and as long as we need to live on that and I wouldn't have major concerns.
Okay, and then I guess just following up on some of the geographical changes can you <unk>.
Elaborate a bit on what you're seeing in the Americas, obviously like it sounds like the Google changes are global.
The conversion.
Conversion divergence in the U S. What would you anything more you can share their.
Yeah. Thanks, Lord I think there's not much to it but to be honest here. So.
I said that.
How to think about July is.
Looking at the second quarter overall in terms of revenue decline and that is true by region.
So it's not that.
One region performed significantly better or worse than than others relative to the second quarter in July .
So that makes it quite simple and in terms of conversion days, there's not really much to it. So it's it's relatively stable.
In America, we don't see a big change that we saw an improvement in Europe .
Again, which is mostly driven by a mixed effect and then the rest of the world.
I would say, it's partly that mixed effects as well and partly due to the recovery as the book even immersion overall is increasing in that segment.
But catching up to pre COVID-19 levels, and that's all I could.
About mentioned here on the commercial side.
Yeah and.
And then I guess, just if you could explain in maybe a little bit more simple terms what.
What exactly that changes are at Google that that you're seeing and kind of have that's playing out.
Yeah sure.
So Google Road R. A so called property promotion at format in the search engine reside pages. So the the list when you when you type in hotel.
New York, and then that page that shows up there you see now appropriate promotion at.
And there was no doubt before.
We did not participate and does that format prior to this rollout and and when this got more visibility at the expense of traditional at replacement, we lost traffic volumes Uhm and in July we launched first companion to test must unit.
And we will see how that will develop.
I guess, those advertisers who participated <unk> no insights into conversion of that at unit and how that compared to the compared to traditional Edwards and then maybe.
Results that come underneath.
J for example, as well and based on that.
We expect that a bidding dynamics might change as well and with that visibility of that unit, but we were I mean, obviously, we can't predict that we are participating in that format now and we will get our <unk> conversion and.
Returns and based on that we we will decide how to proceed with it further.
And it's basically maybe a visual impression about it's basically a list of hotels.
That is horizontally on top of the hotel.
On top of the Edwards text ads.
And and that leads directly to the advertiser.
And I think the important thing we haven't been part of it because it was part of the Google Hotel, that's product and it's still and we haven't been a part of his sponsors at basic incremental tell us because we tested it and didn't perform well that's why we're not part of it now and now we are getting into it basically.
Alright, Thank you guys.
<unk>. Our next question comes from Kevin K Cool man from TB, Kevin Kevin. Please go ahead. Your line is not a lifetime.
Great. Thanks, a lot.
I was wondering cause you get some more color on.
Response, you're saying for.
The ramp up in advertising.
If you need anything you could share in terms of <unk>.
Traffic levels.
Or engagement.
[noise] responding initially to the to the ramp up in the second quarter of AD spend how that compared to maybe how how users have responded.
Before the pandemic and.
Yeah, I can give you an indication of how it's gonna perform gronk powered X.
So those Thanksgiving.
So as I said, we are happy with the results. That's why we continue to invest in a stick to a plan to ramp up Brian investment despite a low monetization levels.
And what does that mean I mean short term what we tried to measure is a direct response, so with our S. How effectively can we.
Bring people to to our website and obviously what is relevant is is that incremental traffic and that's where we are trying to measure. So if I compare what I see right now to pre Covid then.
Obviously, there are some differences by market and in some markets.
Better in some markets.
Slightly was on average I would say pretty similar which is good.
Because we ramped up.
And we still compared to last year for example, see the same respond at at the <unk>.
And that's why we continue to invest and yeah.
In terms of engagement.
I think that.
Not a big change you call out which is also positive. So it's not that you bring traffic to the website and the.
Traffic.
Mmm doesn't engage all you see lower conversion go anything it's pretty good from what we see and again not materially different from what we have experienced maybe in 2019 or pre COVID-19.
Okay, Great and then just a separate one.
There was a.
European low cost airline.
Mentioned that they had seen some softening in.
Yeah, and close and bookings and in Europe in June and July just wondering if he obtained any anything similar.
I I could not call that out I mean, as I said fonts in July dynamics improved relative to June .
But this could also be because a vast majority of our traffic is not related to.
And in traffic could be one reason could be our mix.
And obviously, there's a lot of noise with all these changes in performance marketing channels.
So maybe that there was some change I mean, we could just we just couldn't see it because of.
All that noise, but.
Looking at <unk> I don't think there's anything we can colog, nor avb's, David Hi, and you don't see a dip and I think that's what we're hearing from airlines and car rentals I think is all that's not what we are seeing.
A moment.
Great. Thanks, Josh Thanks for tests.
Thank you as a reminder, if you'd like to ask a question. Please cresta spell it by one on your <unk>. Thank you Pat. Our next question comes from <unk>. Okay. Fine. Your line is no ice and please go ahead.
Hey dishes towns Velika for Brian Thanks for taking our questions Uhm first I guess.
When you look at the factors that contributed to the soft revenue to to mention that Google as changes, while our traffic Bullard <unk> text.
How would you rank the with respect to their level of impact on revenue.
And then a second if you could exclude the brand advertising portions from total advertising spent just looking at them.
The performance marketing <unk> I guess.
Ross will quake on a year over year and a quarter of a close knit basis.
Yeah. Thanks for the two questions both of the good questions I think.
Difficult to answer though to be honest.
Picked of revenue.
It's difficult to quantify because obviously there are dependencies like when you would experience lower level of monetization. Then yes, you can measure the direct impact, but what is harder to measure the secondary.
Order in fact impact and.
<unk>.
When there's something else going on in the auction.
Like we sold with the Google that changes and then on top of that obviously you you operate in a dynamic market place where.
There are the advertisers and they might change their ROI targets as well.
So that's why we look at the aggregation I think.
Vehicle related impact and obviously.
Obviously, we only call out drive us if we think they are significant enough and contributed to the.
Overall dynamic that we have seen.
And I.
I can't tell you it's 50%.
Normalization and seasonality.
And 50% or 30%.
Monetization and then the rest is Edward changes.
Yeah it.
It's just that those are key drivers and they will contribute to it.
On the brand was performance split.
We don't provide that split.
What what I mentioned is that we continue to be disciplined with all our why performance targets on performance marketing channels.
Obviously this symbolic T always given changes in monetization, giving me the competitive dynamics me seeing the auction.
But overall, our philosophy has not changed.
We continued to run.
<unk>.
Auction.
Mm aforementioned at.
R Y targets that are similar to what we have seen in the past.
<unk>.
On the brand sides.
That.
Obviously, I mean, what I said is.
The incremental Ross is obviously below hundred so the more you spend in the ramp up the more negatively impacted.
Again, I can't give you a specific number on how much that contributed but I think the general direction as the moment you ramp up your brand spent.
That is a short term headwind.
Number.
Alright, great. Thank you very much.
Thank you.
Thank you next question comes from an excellent J P. Morgan sounds per line is now I can please go ahead.
Great <unk>, thanks for taking the questions that too so the first one oh could you elaborate a little bit more on your color overall travels and I know you talk a lot of pay robust it feels like you're advertisers are changing their.
R Y private for your thoughtful curiosity here.
You think that's driven more by consumer combined shifts and a lot of it or do you feel like that came out of my voice is still very strong and there's some pretty horrible targets.
I was just fixing up off of confidence.
That's my question is.
Where are you guys on there on your rock coffin Brandon last night to you expect to continue to wrap up Brian .
I'm going for related to that is when do you expect <unk> to start expanding again.
[noise] yeah. Thanks day.
So.
On your first question I mean the.
The change in our targets of all advertisers, that's something we call it out already and for the first quarter now so it's not that it happened now and.
To be honest it.
It's also not that surprising we mentioned last year that we think.
That we benefit from a storm option, we saw that with markets.
Europe and in America coming back rebounding strongly from Covid that advertises, believing in and the mindset was Moore led to participate in the recovery, let's make sure we gain market share and grow and there was not a strong focus on profitability.
Think towards the end of last year that started to change. The overall mindset started to change not only in trouble, but in general market seemed to.
Favre more profitability over overgrowth and with that we started to see a change in our monitor.
Monetization as well.
Ross targets of all advertise on our platform and <unk>. It's it's.
It's not that we think it's low right now that's why we talk about a normalization, we think the auction as good as healthy, but not as strong as last year and I don't think that is related to any changes in demand demand as I said, we don't see big changes. It continues continues to be robust I mean, there was a <unk>.
Question, we got a lot.
In the last six months or so.
What people wanted to know with the continued high <unk> would that lead to lower demand at some point that it's normal bsba. So we are seeing that both abv's at high levels and.
The only thing we called out as a shorter length of stay and but we haven't seen a deep and demanded this not that we can measure that on our platform.
Uhm.
On your second question, where we are with all blend investments I think it's still early I switched it takes time, it's not that you ramp up in one year and then next thing you have all the effect. It's a it's a long term investment.
And what is also important to understand you can't go from zero to 101 goal, but you have to build it up over time.
And then you create a slightly linda component year by year.
And I think it's still early given that we have an invested in really a method in 2020 and 2021 and only started last year selectively now this year, it's more broadly.
And in some markets, we are ramping up so the way to think about it is that we.
Create a <unk> a brand based on traffic over the next couple of years, and then probably I mean every year you would see a slight improvement.
At least from the inside and then we will comment on that but.
But normally how it works is you see that improvement and then you use that to invest further and grow whatsoever and at some point you will also see from the outside.
Obviously being now at the end of July what we always do every year once the peak season is over for US So mid two in September .
Look at the elbow from a campaign and evaluate how it went and what went well and what we can improve and based on that we then make a decision on on the plan for next year and we will update you on that next time.
Okay, great. Thank you.
Mmk donate some of the questions on the line. So now have that Johanna it's funny cause I can come in.
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