A much-debated tax on internet advertising in France took a big step toward approval on Monday, December 13, only to be withdrawn two days later—and big US companies breathed a sigh of relief.

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Recent weeks have brought a raft of estimates and forecasts for UK advertising spending in 2010 and 2011. For digital media, the news is excellent; for traditional channels, more sobering.

Spending on internet ads grew 10% in the first half of 2010, the UK’s Internet Advertising Bureau (IAB) declared in October. As reported by MediaTel, online spending came to almost £1.97 billion ($3.09 billion), or 24.3% of all UK advertising during the period.

According to the IAB, online display returned to healthy growth in H1 2010, with spending of £381 million ($598 million)—a rise of 6.4% compared to the first half of 2009. Banner ads accounted for 72% of the display market, or £272 million ($427 million), while pre- and post-roll video ads shot up to £20.7 million ($32.5 million), and display placements on social media sites contributed around £41 million ($64 million).

Display ad impressions (excluding video) rose even more steeply than spending between Q3 2009 and one year later, to judge by figures from comScore Ad Metrix. This suggests that advertisers were getting much better value for their display budgets in 2010, which doubtless encouraged more committed spending.

Classified ads also staged a comeback in 2010, the IAB reported, climbing 11.4% to £379 million ($595 million) during the first half of the year. Paid search marketing rose by 8.9%, to claim 59.9% of all online ad spending, or just over £1,180 million ($1,853 million).

The IAB saw the double-digit rise in online ad spending as part of a more general recovery; by its calculations, total UK ad spending reached £8.1 million ($12.7 million) in H1 2010, 6.3% higher than spending in the first half of 2009.

The Bellwether report, issued by the Institute of Practitioners in Advertising (IPA) and accountancy firm BDO LLP, was less upbeat, noting that the ad budgets of UK marketers rose by an average 0.5% in Q3 2010—a marginal gain, though a welcome contrast to the 4.6% fall registered in Q2.

Like the IAB, the IPA found that the internet delivered the outstanding success stories, with spending on search up 9.9% in Q3 2010, and display spending up 13.3% compared with the previous quarter.

The IPA did point out that most of the 300 or so firms polled for the report were less optimistic about the financial prospects for their industries than in Q2. Moreover, the report’s author ventured that the strong economic performance in Q2 “likely marked the peak of the recovery cycle.”

Looking ahead to 2011, the latest Consensus Forecast from the World Advertising Research Centre (WARC) projected that worldwide ad spending will rise by 4.5%, following a gain of 4.4% in 2010.

Most of that growth will be driven by emerging markets, such as Brazil (where ad spending is predicted to leap 11.4% in 2011), China (13%), India (14%) and Russia (16.3%)

The UK and most other major European countries can expect minor gains by comparison. UK ad spending will rise 2.7% in 2011, said WARC, or just over half the 5% growth anticipated for 2010.

France and Germany will see 2% growth in total ad spending, while Spain will register a gain of 2.2%, after a decline of roughly 1% in 2010.

Globally, WARC foresaw average 2011 increases in Internet ad revenues (13%) far outpacing growth rates in traditional media (5.2% in TV, for example).

The UK, long a leader in internet advertising, will show the lowest growth rates, according to WARC. But even then, online ad spending will be an estimated 6.2% higher in 2011 than in 2010.

Most recently, key companies in the WPP Group, including agencies Ogilvy & Mather and Mindshare, raised their overall forecasts for revenue growth in 2011. According to CEO Sir Martin Sorrell, the revisions were based in part on WPP’s own 4.5% growth between January and October 2010. Group companies had earlier suggested that they anticipated expansion of between 3% and 4% in 2011.

Where does this leave UK ad spending, and online ad spending in particular? Some key aspects to keep in mind:

1. The economic situation remains volatile. In the past week alone, the UK has been buffeted first by news of another national financial bail-out in Ireland (the UK’s number one trading partner) and then by claims that the economy grew by 0.8% in the third quarter, and that spending cuts by the Conservative/ Liberal Democrat coalition government will not have as drastic an effect on public sector jobs as previously feared. The arrival of good and bad economic news in quick succession has been a hallmark of 2010, and looks set to continue as 2011 approaches. This uncertainty will weigh on advertisers, but most have little choice but to maintain spending at or above current levels. After the declines of 2009, further trimming might affect their market shares.

2. For the moment, the consumer mood is largely positive, buoyed by the prospect of Christmas. Many high street retailers—and several online players, including Amazon—are already offering mark-downs, and sales are healthy in many sectors. In the week ending November 13, the John Lewis group recorded sales of £76.93 million ($120.78 million), up 11.5% on the previous week, and 6.8% higher than the corresponding week of 2009. January may bring a less happy mood, however, as the holiday spirit recedes, some jobs are in jeopardy and value-added tax on most purchases goes up to 20%.

3. While growth in total ad spending may languish in the low single digits, there is little doubt that digital will again outpace traditional media, as in 2009 and 2010. Industry observers are unanimous in predicting that display (driven by sharply higher spending on video ads and social media placements) will gain further momentum, while paid search also thrives and mobile marketing moves up a gear.

A new proposal governing distance selling (including online retail) will be debated by the French National Assembly on January 19 and 20, 2010. Its main aim is to ensure that merchants dealing with non-local buyers follow clear standards of business practice. Online stores would not be entitled to accept orders and payment when they are in danger of bankruptcy or anticipate being unable to meet their obligations as suppliers. Sellers that break the law would be fined €30,000 ($42,000 at average 2009 exchange rates).

In some notorious cases (link is in French), online buyers in France have been left without refunds or immediate legal recourse when an e-tailer has ceased to trade.

In addition, the new law would prevent transport firms claiming costs from the customers they deliver to, when a merchant is unable or unwilling to pay for delivery as promised. At the moment, Internet shoppers may pay delivery charges online in the course of a purchase, and still be asked for more money when the goods arrive.

Internet retailers would also be required to make their terms and conditions available via a link from their home pages (many firms have allowed customers to see the small print only after an online transaction).

The proposed law—expected to pass without major opposition—should encourage more French Internet users to buy online. But e-commerce has caught on in a big way even without these safeguards, and now plays a key part in consumer purchase patterns.

For example, 72% of online buyers in France polled at the end of 2009 said they would be buying on the Web during the post-holiday sales period, according to a survey by DirectPanel for the Fédération du e-commerce et de la vente à distance (Fevad). The intention to purchase online was higher among women than men. It was also relatively high in households of three or more people (55%) and respondents younger than age 35 (about half of these said they hoped to take advantage of sales online). The average budget for those planning Web buys was €168 ($235).

Fevad has also said it expects online sales in the 2009 holiday shopping season to top €5 billion ($7 billion), 25% more than for the equivalent period in 2008.

 E-commerce sales in France rose 30% in Q3 2009, relative to the third quarter of 2008, according to the Fédération de l’e-commerce et de la vente à distance (Fevad).

The number of online transactions by French buyers between January and September 2009 was up 34% on the equivalent period in 2008,  said Fevad. Average order value fell 1%, however.

Most of the growth seems due to the more than 15,000 e-tailers that opened their virtual doors for the first time in the previous 12 months—as well as the expanded product and service offerings of older online merchants. François Momboisse, president of Fevad, noted that the number of online buyers had risen only modestly in a year.

The holiday season looks set to bring further cheer to France’s e-commerce sector, especially now that the country has officially emerged from recession. A full 83% of Internet users polled by Médiamétrie said they planned to consult the Web when shopping for gifts, and 70% said they would buy at least some of their holiday items online.

Fevad predicted that online sales in the fourth quarter of 2009 would be 25% higher than in 4Q 2008, and reach €5.4 billion ($7.94 billion). That would take total 2009 online spending by consumers in France to €25.2 billion ($37.0 billion). Fevad anticipates that annual online sales will pass €30 billion ($44.1 billion) in 2010.

A French-language summary of these and other research results is here.