The company, which sells advertising across more than 50 travel sites including LonelyPlanet.com and RandMcNally.com, will use the funding to expand operations in the U.S. and abroad and increase the size of its network.
In connection with the investment, Habib Kairouz, managing partner at Rho Ventures, Doug McCormick, former CEO of Lifetime Networks and ex-chairman and CEO of iVillage, and Benjamin Wolin, co-founder and CEO of Waterfront Media, will join Travel Ad Network's board of directors.
Having boot-strapped the company for the last five years, founder and CEO Cree Lawson said the capital infusion "will help us build the largest travel audience online." With 9.3 million unique U.S. visitors in March, Travel Ad Network is the top-ranked travel information site, just ahead of Yahoo Travel, according to comScore.
Lawson said the company plans to grow to 75 to 100 employees by year's end, up from almost 30 currently. Much of the hiring will be focused on building up its sales force and expanding overseas in Europe, India, China and South Africa.
Travel Ad Network also plans to expand its network to 100 travel sites by the end of 2008 and to 1,000 in three years. Despite the recent proliferation of vertical ad networks, Lawson said plenty of room remains for growth in the travel category.
"It's a broad market--massively fragmented, and represents a huge portion of online spending," he said. Lawson added that the U.S. alone has more than 10,000 travel sites, with the long tail of sites below the top 100 attracting almost one-third of the traffic.
Travel sites accounted for about 10% of online advertising last year, according to Avenue A|Razorfish's digital outlook report, released earlier this year and based on the agency's billings.
In addition to reach, Travel Ad Network also aims to deliver advertisers an audience beyond those simply seeking out the lowest airfare. "We want early-stage, inspired travelers looking harder and digging deeper for how to have a great travel experience," Lawson said. That usually means more affluent people as well.
Despite the economic downturn and rising fuel costs, the CEO added that he hadn't yet seen a significant fall-off in online travel planning. "We're hoping people think of travel as a right and not a privilege," Lawson said.