Online marketing offers "unprecedented" measurement of return on investment (ROI) and this has been one of the major factors behind the increasing investment in the medium, the head of the Internet Advertising Bureau (IAB) has said.

Guy Phillipson said that prior to the emergence of search engine and pay per click marketing, it was direct marketing – sending material through the post – that provided the best measurement of ROI.

However, with online ads, this information is "instant", which allows companies to adjust their campaigns as they go – both with pay per click ads and display marketing.

"You can tell how many people have seen your advertisement, how many have come onto your site and how many have come to buy online," he commented.

Mr Phillipson’s comments come after a new report from the IAB and PricewaterhouseCoopers showed that investment in online marketing services rose by 4.2 per cent to £3.54 billion in 2009.

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