Online marketing spend outpaced the rest of the British advertising sector over the first three months of 2007, it has been revealed.

The Bellwether Report released by the Institute of Practitioners in Advertising indicated a 19 per cent increase in internet budgets over the first-quarter of the year, with the medium now accounting for just under six per cent of the entire advertising spend.

Chief executive of the Aegis group Robert Lerwill said: "The growth in digital is being driven by the convergence of media and entertainment.

"This process is pushing the boundaries of digital marketing, making it more attractive to a broader range of demographics and therefore advertisers."

Overall, British companies were reported to spend some £2 billion on internet marketing every year.

A study conducted by the UK Association of Online Publishers earlier this week revealed that internet publishers saw their online revenues rise from £344 million in 2005 up to £575 million last year.