The decline in online ad spend, including search, 'gathered pace', according to the report, but eased in other sectors, suggesting that internet budgets have not yet bottomed out while other ad mediums may recover in Q2.
For Q1, 45 per cent of firms surveyed said they cut their marketing budgets, compared to 11 per cent which increased them.
According to the Bellwether, budgets for the 2009 financial year had been set lower than the actual spend in 2008, for the first time since the report was first published.
Chris Williamson, report author and chief economist at Markit, said the latest figures indicate the rate of budget cutting will ease in 2009, after hitting an all-time low in Q4 2008.
"Any return to growth still looks a long way off, however, and is unlikely to be seen this year, as expenditure on all types of marketing and advertising continues to fall at rates that were unprecedented prior to last autumn," he said.
While some of the biggest online advertisers including BSkyB and Orange cut back on digital marketing in 2008, O2 (the UK's biggest online advertiser) spent £12.4m, consistent with 2008 levels.
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