Expedia splash cash on marketing

Online travel bookings firm Expedia has announced that it is to invest around £500 million of its revenue in marketing during 2008.

Following record profits in the first quarter of 2008, reflecting a 48 per cent increase in year-on-year revenue, online marketing looks set to be the prime target.

According to Expedia chief executive officer Dara Khosrowshahi its marketing boost is fuelled by a focus on continued keyword inflation and support of “established brands and geographies”.

He noted that most of the funding will be spent on “traffic generation costs from search engines, brand advertising (primarily television) our private label and affiliate programs”.

This marketing investment represents around 40 per cent of all revenue accrued on marketing, just under half of it will be spent on staff and other indirect costs.

Expedia is also keen to reduce the gap between the large number of holidays booked online and the small amount of advertising on the internet.