Online marketing spending has increased over the past 12 months, new research has revealed.

Figures compiled by Econsultancy and Clash-Media showed that 61 per cent of a firm's marketing budget is now invested online, up from 51 per cent 12 months previously.

Better return on investment, a greater ability to target individual markets and cost-effectiveness were identified as reasons why firms are choosing to increase their spending in areas such as pay-per-click marketing, search engine optimisation and email campaigns.

Use of email marketing increased by two per cent over the year, the data indicated, however there was a 12 per cent fall in the number of companies opting to use paid search.

Chief executive officer of Clash-Media Simon Wajcenberg said that it is "great news" marketing departments are increasing their budgets and spending more online.

He added that it is surprising only 35 per cent realised the benefits performance bases campaigns can offer, noting: "This leads us to believe that not enough providers are delivering transparent campaigns, which inhibits their ability to be performance-based."

Earlier this month, MediaPost found that business-to-business companies are increasingly opting to use email marketing in order to educate clients and publish research articles and trend analysis.