Bradley Erickson : Thanks. So you gave the net subscriber number, like you normally do at the end of the year, which I guess was up, call it, modestly year-over-year, reflected a lot of that churn you’ve talked about in the last few quarters. Talk about the top-of-funnel you’re seeing right now for subscribers, new subscribers and sort of what it’s going to take to get back to the quarterly net add cadence that you used to do before COVID. Just curious if we can get back to those types of levels here this year or next?
Nir Zohar: Brad, it’s Nir. So, I want to kind of reiterate our thinking around the net subs and actually give some more color. First of all and foremost, you have to remember, we’re always aiming to optimize and drive higher cohort value. This has led also to our decisions around focusing on higher intent users. It’s part of what we’ve done in terms of how we made our pricing decisions, in terms of being willing to take less subs but at a higher price with a higher value. Now when you think about what you see in 2022, you have to remember that the cohorts of 2022 and 2021, which are relatively still young compared to 2022 were very, very big cohorts. They grow a lot of subs into the system. And they have converted in elevated numbers, they are retained at similar numbers as previous cohorts.
But because their sheer size is bigger, because the heightened demand of COVID, when some of them gets canceled in terms of the subs that obviously creates an impact on the net subs throughout 2022. And that specific behavior will probably last a little bit longer as these cohorts mature and stabilize. The other thing that we’ve seen is that the macro impact affects also existing cohorts, which makes a lot of sense because these are made also out of small businesses that are trying to retain and build the business in a much more challenging environment. And lastly, another thing that impacted 2022 was the need or the decision to eliminate our business in Russia after it invaded Ukraine. So I think all of those have €“ had that kind of impact on our net sales in 2022.
But I want to say something which is €“ illustrate something which, I think. is more important here. And this is about the ARPS. When you look at our ARPS, it has increased by 29% from 2019. And when you think about that metric, ARPS used to be, in the past, a very uniform metric for us because the variance between the different subscriptions was relatively very small. And therefore, it increased over time because we optimized prices, because we added more functionality and helped people drive them towards a little bit of the higher subscription, but it was still very uniform, in general. In the last few years, we are seeing a change, a very significant change where we are getting much more complex websites being built on our platform, for which the price point can go to the thousands and even to the hundreds of thousands of dollars, which means that ARPS is not uniform anymore, which also explains why we’re de-focusing our thinking about net adds and focusing so much more about the absolute value in the cohort itself.
So I hope that answers your question.
Operator: Thank you. We’ll move on to the next question. This question comes from Ygal Arounian of Citi. Ygal your line is open.
Ygal Arounian: Hi, good morning guys. I wanted to ask about ChatGPT integration. And I know you guys have always talked about when you rolled out ADI that was a big kind of driver of conversion. And I know it’s really early just thinking through that if there’s any parallels and if you expect that this might drive a pump in conversions as we go through the year. And then just going back to the marketing efficiency. Just on that 50%, is there a little bit more you could share as to kind of the learnings from that? Is that you’re just targeting higher-intent customers or users that are going to convert at a higher rate or spend more? Does that mean that you’re focused less on maybe the DIY creators, the self-creators, as you guys call them, or is that not the right basis to make on that? Thanks.
Avishai Abrahami: So I’ll start with the first one. Yes, we’ve been €“ I think when we started ADI, which is Artificial Design Intelligence, right, it’s was the first, I think, AI product to the mass market and maybe with the exception of some things that do voice speech. So, we’ve been ahead of the curve on that for a while, which today we have a lot of different things. For example, we have a way for you to edit images with AI. So for a lot of you upload the product, we’ll clear the background and make the photo better. That’s one example that we released a few years ago, ADI. And now we introduced ChatGPT. So this is really open AI ChatGPT. It’s not some hybrid we build. And we know that one of the hardest things for many people is to write the content on the website.
So by adding ChatGPT, we make it, well, a lot simpler, right, and a bit more creative in many cases. So I think it’s a tremendous value for our users. And in the next year, you are going to see some additional, very cool things that we’re doing with AI now, again, to simplify our users are €“ our users are interacting and creating a website, which is kind of a complex thing, right? It’s a very complex thing because think about it, it has many different assays, right? You write many different pieces, all have to look together, the graphic has to come all together. So, we have a lot of things we can do there to make Wix simpler and better use for self-creators. When it comes to acquisition, so you were touching the right point there, which is, yes, this is €“ if you look at the brand, Wix is a very strong brand for self-creators.
I think we did a very good job emphasizing that. What we’ve seen in the last, pre-COVID, we’ve already seen that the brand was separating itself from the rest of the clutter and during COVID, a lot of new people have arrived that were not thinking about building OS but now they had to. So it was a mass opportunity to educate a big portion of the population about Wix. And last year, we started to notice that the brand has become so strong that it’s more than the generic way that people actually look for Wix. So that is all for self-creators. And of course, we’ve proven that now by the fact that we can actually eliminate a lot of that direct acquisition and the brand equity hold. The next thing that we’re doing, of course, is building €“ starting to work on a similar strategy for where we are less strong.
And that’s why we will continue to invest in branding and, of course, with acquisition. But as we €“ even if we go after partners, right, we’re very complex website, the brand value that we have from Wix and the investment that we did carries into that, that which is enabling us to do that with a smaller acquisition costs.
Operator: Thank you. This question comes from Andrew Boone of JMP Securities. Your line is open.
