• silicon.com
• Technology
• Networks

By Jon Bernstein, 31 July 2001 07:30

NEWS The UK's leading online travel agent ebookers is cancelling a £15m advertising deal with AOL Europe as part of a major effort to move its advertising and marketing spend offline. ebookers online advertising budget has been slashed by 17 per cent. The announcement comes just a day after the company issued healthy half yearly results, which saw sales double and pre-tax losses down from £18.5m last year to £17.2m this year. But with profitability on the horizon as early as next year, ebookers chief executive Dinesh Dhamija said the time had come to pull the plug on the AOL Europe deal. Signed in February 2000 - weeks before the high-tech crash - the 'tenant' advertising agreement gave ebookers significant exposure on the AOL portal and was designed to help the company attract customers from outside the UK. Ebookers has operations in 11 countries. Speaking yesterday, however, Dhamija said the model for online e-tailers was now clear. "I come from the offline world, where the costs of marketing are cheaper and I know it works," he told the Financial Times. "Get the customers offline and then give them incentives to buy online - that is how it works." Offline advertising will account for 90 per cent of the overall marketing budget in the coming year.