XOXO
#Thanks for your question.
I will give you a couple of numbers and <UNK> will give you the context.
When you look at the transactions business and you look back to where it was growing in 2013 and 2014, it was in the 20%-some odd range.
What typically happens with that business is we have a bunch of product innovation, growth accelerates and it comes back to the more normalized rate.
In 2014 and in 2015 two additional things made that business grow fast.
In 2014 it was adding commerce to our portfolio after getting out of the merchandise business, in 2015 it was adding GigMasters.
These are smaller items, but they do help that growth rate.
When I look at the trends we're seeing and I'd like to make sure I focus everybody on the trends driving this business being traffic, conversion, AOV and take-rate, and I look at some of the larger players that we have, they are seeing their traffic be in the 15%, 20%-some odd growth rate.
A little bit of conversion increase and on a normalized basis I would expect the business to get back toward that 20% range, and that is why that guidance is there.
<UNK>, I'd put that in a broader historical context.
If you look at what we used to call our transactions or a component of our transaction business, the registry business.
Three or four years prior to this team coming in and investing in those products, the growth rate was essentially 0%.
We believe that by investing in better products that better connect our users to the solutions they need, we can drive that business.
You saw that in 2014, 2015, and 2016.
Every year we anniversary those product improvements.
We have to go back in and launch new products.
I mentioned a few in my prepared remarks that we're excited about for this year that we believe are going to be very solid growth drivers.
Each year you're seeing us layer on new products that need to be successful.
That build on the success of the improvements we made in the year previous.
In our categories of broadly speaking endemic and non-endemic.
The reason we saw opportunity to grow our National business when we put this team together is that we had largely maxed out, in aggregate, the budgets of these endemic advertisers.
The Knot has been the leading online publisher in the wedding space for a very long time.
It gets to a point where if you haven't gotten the budget of someone who sells wedding dresses or wedding registries after being the leader in the space for that long, there probably isn't that much budget to get.
We saw the opportunity to improve our sell-through rates and therefore our revenue by expanding beyond those endemic categories.
The gross drivers now moving forward are, I think you'll continue to see steady CPMs in endemic categories.
We think you'll see some downward pricing pressure on our non-endemics.
But we've still got a lot of market opportunity there for ourselves.
You will see that we will continue to grow traffic as we improve our products, and we will sell that increased traffic to these non-endemic advertisers so that in aggregate we continue to grow that National online business.
I'd redirect you to the top-level strategy which is the big opportunity.
The opportunity to grow by multiples of where we sit today is this local marketplace.
This global marketplace where less than 5% of the vendors are writing us a check today, even though we are the leader in the space.
Where we've got a big growth opportunity because we've been investing in and building out this two-sided marketplace.
Driving more traffic, driving more leads, and now you're seeing us invest in that sales organization to go out and get the market share and the revenue opportunity that we believe is ours.
