Traditional marketing strategies still tend to dominate among small businesses, but many are beginning to wake up to the benefits of going online.

Director of marketing consultancy Brand New Way Peter Hawtin said that it very much depends on the individual business which marketing method is likely to be most effective.

"It really depends on the business - you really can't say one media is effective and one isn't," he said. "It depends on the business, the brand, the audience they are trying to communicate with."

According to the Direct Mail Information Service, direct mail accounts for 12.5 per cent of all spending on advertising.

My Hawtin said that many small businesses are still using traditional marketing. "Most of them will use traditional methods of advertising - in terms of press, particularly leaflets - but increasingly people are finding the benefits of online marketing; emails, newsletters and a tiny number are even more advanced [and are] looking at doing blogs."

A recent study from Harte-Hanks found that direct and email marketing offered the highest returns for both business-to-business and business-to-consumer advertisers.

Mr Hawtin said, however, that most firms should consider a web-based strategy as "there are many significant advantages of internet marketing for most companies".