Advert budgets continue to rise.

Company advertising budgets have risen to their biggest level in three years, according to new research.

A quarter of UK firms said they had boosted their advertising spending in the first three months of 2007, the Bellwether Report said.

Companies that spent more on marketing said rising corporate profits and expansion plans were behind the increase.

Online adverts remained a growth sector, with 29% of firms raising their budget for campaigns during the period, taking internet spending to pounds 2bn.

Yet, the online increase was the weakest for two-and-a-half years, as internet spending hit a record high in the last three months of 2006, the report compiled by the Institute of Practitioners in Advertising added.

But Sir Martin Sorrell, head of ad agency WPP, said that despite the increase advertisers still needed to work hard to make the most of the medium.

"Direct internet and interactive spending, however, still lags consumer use of such media, with consumers reportedly spending 20% of their time online," he added.

Main media advertising experienced its first increase in spending for two-and-a-half years.

While most categories of marketing spending all got a boost, sales promotion ( which includes coupons, loyalty cards and in-store promotions ( was the only one to see no change in spending.

No categories experienced a fall in overall spending, but the service sector was the driving force behind most increases.