Righty-o. I've done it two ways. Last year, spent a week in London, messing about, doing last minute bookings to Barcelona. In Barcelona, messed about for a few days and did last minute booking on a ferry to Ibiza. Went in August (HIGHHHHH season). Paid loads, had a really inconveniently located (albeit posh) hotel.
This year, doing it muuuch cheaper. Flying to Manchester. Booked that flight on our own thru BMI. Then, got in touch with travel agent friend in England and booked a package holiday with her from Manchester to Ibiza. Wicked cheap. (Relatively speaking; the whole England - Ibiza thing, with airfare & accomodation for a week is less than $500/person) Even travel agents in the US discouraged us from booking any Ibiza holidays here, as they will be loads cheaper in & from Europe.
Just another word of advice... While August is the month that ev'rybody goes, it's also the most expensive, especially for Americans, as we're paying peak fares for flights to Europe plus peak rates once you're there. We're going late June, early July this year and saving about $250/person just on the flight to Manchester alone.