With a nascent recovery underway in the UK economy, many businesses are now examining the problem of attracting new customers while still operating on a tight marketing budget.

Cyprus-born entrepreneur and Dragons’ Den regular Theo Paphitis told the Times that spending on internet marketing services during a downturn can help businesses to steal a march on their larger rivals.

As big firms cut their overheads, more "light-footed" firms can use online marketing to boost their customer base without breaking the bank, he said.

"Good website design is better value than it has ever been and while it will cut your margins, pay per click [PPC] and affiliate campaigns can reap rewards," Mr Paphitis commented.

His comments come after a survey by the Times and Barclays found that almost half of companies think they need to improve their marketing, with 44 per cent saying there is a need to attract new customers.

Mr Paphitis said that in order to get the most out of their website and PPC marketing, firms should bring in a specialist in internet marketing services.

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