British marketers increased their spending on web advertising by 17 per cent in 2008, according to the latest Internet Advertising Bureau (IAB) report.

The statistics were compiled by PricewaterhouseCoopers and the World Advertising Research Centre and showed that £3.3 billion was spent on internet marketing in total last year.

Search engine marketing reaped the lion's share of this spending, accounting for £1.9 billion or 60 per cent of the total.

It also recorded growth of 22.7 per cent year-on-year, the IAB noted.

Elsewhere, £637.4 million was spent on internet display ads, up 7.7 per cent compared with 2007, while classifieds spending rose by 22.2 per cent to £715.2 million.

Overall, the internet was the only marketing medium to record a rise in spending last year, the IAB said.

Guy Phillipson, chief executive of the organisation, commented: "UK advertisers have become digital-savvy and they're now using rich media, ad networks and search in intelligent ways to achieve their sales and brand targets."

Recent statistics from the Interactive Advertising Bureau in the US revealed that online spending in the country increased by 10.6 per cent in 2008.

US pay-per-click spending rose by almost 20 per cent in total.