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However, large internet advertising companies such as Google, which has reported soaring advertising revenues in recent quarters, have insisted that click fraud is under control.

Chris Lake, the editor of e-consultancy, the online-marketing consultancy, said: "We have talked to the major market players on this, and they have consistently said that they are acutely aware of the dangers of click fraud.

"They insist that they are all over this problem and give the impression they feel the dangers are perhaps being exaggerated."

"For individual advertisers, it is hard, if not impossible to think of a medium that gives more accountibility than the internet."

The most recent warnings came as a joint report from Thomson Intermedia, the marketing agency, and KPMG, the professional services group, showed that advertising spending in Britain surged by 5.4 per cent last year as television and print looked to weather the onslaught of internet spending.

Television advertising was up 4 per cent at 4.2 billion, despite concerns that consumers are spending more free time online and are using new digital recorders to skip traditional ad breaks.

Spending in the national press was steady at £1.8 billion, while outdoor advertising gained 2 per cent at £754 million.

Sarah Jane Thomson, the chief executive of Thomson Intermedia, said: "The data shows that it is premature to announce the long-term decline of the traditional mass media such as TV and press,

"They remain the predominant media for many campaigns, although the fragmentation of audiences and the rise of new media will present increasing challenges to advertisers and their advisers."

However, analysts have offered some analysis of internet marketing trends. Michael Higgins, a KPMG partner, said that the IT and communications, taken together with the entertainment, media and leisure sectors accounted for almost half of online display spending.

Travel, retail and FMCG all saw increases in expenditure over the year, while the finance sector saw the biggest fall, he added.

Budgets did not increase across the advertising industry last year. Cinema advertising slumped 4 per cent at £139 million while spending on direct mail campaigns fell for the second year, following many years of rapid growth.

Mr Higgins said: "After many years of strong increases, spend on direct mail has gone into reverse. On the other hand, the financial services and retail industries both seem to have made significant switches from direct mail to door drops."

The rise of e-mail marketing, better targeting of direct mail, and consolidation among marketers, especially in financial services, were cited as causes behind the fall in direct mail spend.

"With a stable to slightly positive outcome in 2005, the outlook for advertising expenditure in 2006 is difficult to call. However we do expect to see increasingly sophisticated use of research to enable advertisers to switch in and out of the smaller media to gain advantage," Mr Higgins added.

To have your own say on Google, visit the Times Online technology blog.

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