Nearly a quarter of Canadian businesses raised their marketing budgets in the first quarter of the year.

Internet spending showing the largest gains, according to a survey for the Institute of Communications and Advertising.

The study found that 23.3% of companies increased their spend compared with 12.6% who did the opposite.

Chris Williamson, head of economics at NTC Research which carried out the survey, said the results could be treated as a yardstick for the Canadian economy.

"Marketing budgets are related to corporate profitability. As soon as businesses get a sign that things are picking up, they need to respond to that with marketing."

The study recorded growth in all areas but sales promotion, direct marketing and internet advertising were the main beneficiaries.

"In the past year, we've seen companies look for alternatives to more expensive TV and print advertising. There's a lot of experimentation going on with advertising over the internet, especially direct advertising," Williamson said.

Overall 27.5% of businesses revised their internet budgets up, while just 5.5% reported a decrease.

By comparison, 21.8% of clients raised their first quarter budgets, while 13.9% lowered them.

At 3%, however, internet marketing is still a small part of the average company's marketing budget.

Nearly 35% of the 270 executives surveyed said they had no plans to direct any of their budgets towards the internet.

Data sourced from:; additional content by WARC staff